Dow soars to new record high
Recent statements by Fed bankers are giving traders on Wall Street food for thought: will there be no interest rate cuts soon after all? Despite the slightly gloomy mood, the US indices continue to climb. The gold price, on the other hand, interrupted its recent rally.
The rally on Wall Street following the Fed's latest decision has come to an end for the time being. The leading US index Dow Jones gained 0.2 percent to 37,305 points - a new record high. The technology-heavy Nasdaq advanced 0.4 percent to 14,813 points and the broad-based S&P 500 closed little changed at 4719 points. This was the third record close in a row for the Dow. On a weekly basis, all three indices were up for seven weeks. For the S&P, this is the longest streak since 2017.
The gloomy mood was caused by new statements from US central bankers. The current talks about interest rate cuts are "premature", said Fed representative John Williams in an interview with US broadcaster CNBC. Investors' interest rate cut fantasies after the Fed meeting on Wednesday had triggered a brief spike on the stock markets. The monetary authorities signaled that they are already considering downward steps for 2024. "After Powell's U-turn party, we have now been shaken up by Williams," commented Michael Hewson, chief analyst at broker CMC Markets. However, Art Hogan, chief strategist at asset manager B. Riley Wealth, was calm: "It's not unusual for Fed spokespeople to try to quell exaggerated reactions to a particular Fed meeting.
Gold up and down
The dollar index traded at 102.615 points, up around half a percent after its recent losses. In contrast, the euro fell by 0.9 percent to 1.0891 dollars. The price of gold also interrupted its recent rally. The yellow metal fell by 0.8 percent to around 2019 dollars per troy ounce. "Gold experienced a real rollercoaster ride this week," said Hewson. "First the price fell to a four-week low before recovering strongly after Powell's statements on Wednesday. Now Williams is dampening investors' expectations." Nevertheless, the gold price is likely to end the week higher. On Friday evening, it was almost one percent above the previous week's close.
Oil prices, meanwhile, embarked on a cautious recovery. North Sea Brent crude and light US WTI crude rose slightly to 76.76 and 71.59 dollars per barrel (159 liters) respectively. They had previously slumped by up to 1.7 percent after a survey of US industry showed a decline in new orders. Investors interpreted this as an indication of weaker demand for oil in the coming year, said Phil Flynn, analyst at broker Price Futures. "The market is sensitive to every new headline. Investors are still not sure if oil prices have bottomed."
Among the individual stocks, the big expiry date, when prices usually fluctuate sharply because investors want to move the prices of the securities on which they hold derivatives in a direction that is favorable to them, made itself felt. Futures and options on indices as well as options on individual shares expire during the course of the day on the so-called witches' Sabbath. Costco , among others, was in demand with a price increase of 4.4 percent. The US retailer presented quarterly figures above analysts' expectations thanks to strong demand for low-cost food. Its sales rose by 6.1 percent to 57.8 billion dollars in the first quarter. Experts surveyed by LSEG had expected an average of 57.72 billion.
Investors also stocked up on shares in chip manufacturer Intel , which rose by around 2.2 percent to 46.16 dollars. The experts at analysts BofA Global Research had upgraded the shares to "Neutral" from "Underperform". The target price was also raised from 32 dollars to 50 dollars. The background to this was, among other things, growth opportunities for Intel's business with chips for vehicle sensors.
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The Dow Jones' record-breaking performance continues to attract interest in stock trading, with its gain of 0.2% pushing share prices to 37,305 points. Traders are closely monitoring the Fed's stance on interest rate cuts, as recent comments from Fed representatives have hinted at delaying such cuts.
Source: www.ntv.de
