Nvidia recovers effectively following stock drop
Following market adjustments and a drop in stock values, Nvidia becomes appealing again for newcomers. While overall tech indices are on the rise, the Dow closed in the negative. Investors are hesitant ahead of the publication of key inflation data on Friday.
The United States stock markets ended the day unevenly last night. The Dow Jones Index closed 0.8% lower at 39,112 points. Losses in Walmart (-2.2%), Home Depot (-3.6%), and Dow (-2.7%) impacted the Dow. However, the S&P 500 rose by 0.4%, and the Nasdaq Composite even rose by 1.3%. In total, there were 1007 (Monday: 1,934) winners and 1,784 (864) losers. 92 (89) titles remained unchanged. Investors were generally prudent, as the much-anticipated Core Personal Consumption Expenditures (PCE) Price Index will be released on Friday – the preferred inflation measure of the US Federal Reserve. Economists predict a decrease in price growth. This could lead to a September interest rate cut being more likely.
Federal Reserve Governor Michelle Bowman, however, is open to raising interest rates under certain conditions. "I am still prepared to raise the target for the federal funds rate at a future meeting if progress in inflation falters or even reverses," she said in a published statement. Federal Reserve Governor Lisa Cook, on the other hand, considers the timing for a rate cut uncertain and data-dependent. "With a significant improvement in inflation and a gradually cooling labor market, it will be appropriate at some point to reduce the level of monetary restraint to maintain a healthy economy," she said. She did not specify a concrete path.
The Chicago Fed National Activity Index was released, which recovered in May to a level of +0.18 from -0.26 in the previous month. However, as expected, the sentiment among US consumers worsened in June. The Index of Consumer Sentiment fell to 100.4. Economists had expected a reading of 100.0. The previous month's value was revised downward from 101.3 to 101.2 at first.
Nvidia with substantial gains - Carnival with price surge
The technology sector's stocks recouped some lost ground. Nvidia, which had been heavily sold off due to profit-taking in the past three trading days and lost approximately 13%, gained 6.8%. However, the total gains for the AI icon since the beginning of the year still amount to around 140%. Super Micro Computer increased by 1.9%. Arm Holdings gained 6.3%.
Microsoft's stock saw gains of 0.7%, despite the EU Commission announcing that it would examine the company for potential antitrust violations. The Commission is investigating whether Microsoft has inhibited competition in the EU by bundling Teams with its productivity software. Ford (-1.2%) is recalling over half a million units of its popular F-150 pickup trucks due to unintended downshifting of the transmission, regardless of speed.
According to compelling business figures, Carnival Cruise Line's stock rose by 8.9 percent. Meanwhile, Solaredge Technologies dropped by 20.6 percent. The company announced in a separate statement that a customer, who owes Solaredge 11.4 million dollars through a secured bond loan, recently filed for bankruptcy.
Dollar somewhat stronger - Oil prices losing ground
The Dollar was somewhat stronger in the currency market. The Dollar index went up by 0.2 percent. The USD benefited from a slight weakness of the Euro, according to the currency market. Analysts at ING do not see sustainable upward potential for the Euro due to uncertainty before the French elections.
At the US bond market, yields showed little change after the previous trading day. The yield on 10-year papers rose by 0.2 basis points to 4.24 percent. Allianz Global Investors holds onto their long positions in 10-year US Treasurys in their Multi-Asset-Portfolios and also expressed concerns about the market due to the uncertain outcome of the French elections.
Oil prices gave back some of their gains from earlier in the week. Prices for the WTI and Brent crude oil varieties fell by up to 1.2 percent. Market participants see the prices as well-supported by the increasing demand for fuel during the summer vacation season. The gold price gave back the previous day's gains with the stronger Dollar. The price for an ounce of gold fell by 0.6 percent.
Everything else about today's stock market developments can be found here.
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Despite the tech-sector recovery, Fed Governor Lisa Cook expressed uncertainty about an imminent interest rate cut, stating it would depend on economic data. In contrast, Nvidia's stock, which had experienced a significant drop, saw substantial gains, recovering nearly 7% on the day. Despite these gains, Fed Governor Michelle Bowman remained open to potential interest rate hikes under certain conditions.
