Following a challenging Monday, US stock markets have bounced back.
Following a noticeable decrease at the start of the week, Wall Street managed to recuperate and even surpass its losses. Particularly, the Nasdaq experienced a substantial increase. As investors wait for new US data, anxiety about the Chinese economy is prevalent.
The Wall Street went through a brief pause in its decline. The Dow Jones Index of prominent companies closed 0.3% higher on Tuesday at 42,080 points. The Nasdaq, which has a heavy inclination towards technology, increased by 1.5% to 18,182 points. The comprehensive S&P 500 gained approximately 1% to 5,751 points.
"Yesterday, we experienced a significant sell-off. In such situations, a minor recovery is not unlikely, given the lack of substantial new data today," commented Fiona Cincotta, the chief analyst at broker City Index. The diminished enthusiasm for interest rates following the latest US jobs data and concerns related to the Middle East had led to a 1% decrease in US indices on Monday. Now, investors are anticipating significant occurrences later in the week.
The upcoming US inflation report for September, to be released on Thursday, is of particular importance. Market participants seek to glean insights from it regarding the magnitude of the next interest rate cuts planned by the US Federal Reserve, which is attempting to control high inflation through tight monetary policy. "The Fed continues to affirm that its next moves depend on the data, so we need to ascertain by the end of this week whether inflation is indeed being tamed or not," said Kim Forrest, the chief investment officer at investment advisor Bokeh in Pennsylvania. However, she remained composed. "The Fed has signaled where interest rates are headed, and that's down - even if it hasn't signaled when that will occur."
Further developments related to China's economic stimulus measures remain under scrutiny. Disappointment ensued lately due to a lack of detailed information provided during a press conference by the National Development and Reform Commission regarding the announced support measures for China's economy or a fresh impetus. "Markets anticipated directions for the size of the fiscal incentives," said Rong Ren Goh, the portfolio manager at investment manager Eastspring in Singapore. However, there were minimal details on new fiscal measures in China that would supplement the monetary incentives announced two weeks earlier. The biggest economic stimulus package since the pandemic, introduced two weeks earlier, had driven a surge in the markets.
Roblox under scrutiny due to short-seller accusations
With regard to individual stocks, the shares of conglomerate Honeywell saw an increase of 1.8%. The company's plans to spin off the Advanced Materials business unit garnered support from investors.
PepsiCo's quarterly report received a generally positive response from investors, despite mixed results. The shares of the beverage manufacturer rose by almost 2%. Despite lowering its annual sales forecast, CEO Ramon Laguarta maintained PepsiCo's growth target for earnings per share at plus 8%.
Meanwhile, Roblox came under fire due to allegations by short-seller Hindenburg. The shares of the online gaming platform dropped by over 2%. The US analysis firm has taken a short position - a bet on a falling stock price - on the shares. According to their justification, Roblox has manipulated key metrics such as user numbers and activity on its platform. A spokesperson for Roblox denied the allegations.
From the warehouses, US-listed stocks of Chinese companies also witnessed a jump. Shares of e-commerce specialists JD.Com, PDD, and Alibaba dropped between 5.4% and 7.5%.
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After the positive performance of Wall Street, traders might consider engaging in more ['Trading in shares']. The recent surge in the Nasdaq, affected by technology stocks, has attracted the attention of many investors.
Despite the accusations of manipulation by short-seller Hindenburg, investors may still find opportunities in ['Trading in shares'] of online gaming platform Roblox, given its strong market position.
