Stock market ends daily session with declining prices
Wall Street aims for direction following impressive US employment statistics. The Dow finished with a 0.2% drop after a rollercoaster session. Nvidia's equity division slowed the sell-off.
In a tug of war between diminishing hopes of lower interest rates and an impressive jobs report, US markets stayed afloat towards the end of the week. Bond prices plummeted considerably, pushing yields up. However, yields in a weekly summary saw a decline - from around 4.50% to 4.43%. The jobs report lowered expectations of interest rate cuts, as there were more jobs created in May than anticipated. Additionally, wages increased more than predicted. The likelihood of a September rate cut at the Federal Reserve tumbled to 50% from previously around 70%.
The Dow Jones Index ended with a 0.2% reduction at 38,799 points. The S&P 500 and Nasdaq Indices also dipped slightly below their previous day's closings and thus their record highs. On the New York Stock Exchange, there were 786 (Thursday: 1,258) victors and 2,025 (1,542) losers. No changes occurred among 72 (77) issues.
Interest rates drove up the dollar. The dollar index rose by 0.8%. The euro slipped from around 1.09 to about 1.08 dollars. The price of gold took a hit. After gains in the preceding days, the ounce of gold fell by 88 dollars to 2,288 dollars, or 3.7%. The increasing interest rates make bonds a preferable investment over gold. Furthermore, the strong dollar made gold more expensive for non-dollar area purchasers. Market players additionally cited China's failure to increase its gold reserves in May. At the oil markets, there was minimal change.
Nvidia Presplit
Stocks from the banking sector experienced the most gains (+0.9%), as higher interest rates boost the profit margins in the lending industry. On the other hand, stocks from the capital-intensive and interest-sensitive supplier sector (-1.1%) performed poorest.
Nvidia, surpassing $3 billion market capitalization on Wednesday, had yet more triumphs on Thursday. However, on Friday, the stock only dropped by 0.1%. Supporting this was the news of a Monday share split. Shareholders will discover 10 Nvidia shares instead of one in their accounts. The measure aims to make the $1,208 stock more affordable and enticing to a broader audience of investors.
GameStop's Dive
Once more, turbulence erupted in the so-called meme stocks. Following a major increase on Thursday, Gamestop plummeted by almost 40% on Friday. Earlier in the week, renowned investor Keith Gill shared an image showcasing his sizable Gamestop investment. On Thursday, the revelation that Gill would broadcast a live event on Friday led to a stock frenzy. Gill reiterated he was acting independently without institutional support. He also displayed a screenshot of his brokerage account, exhibiting his unaltered Gamestop holdings.
Surprisingly, GameStop issued preliminary financial figures alongside a plan to sell 75 million shares. In comparison to the previous Friday, GameStop was still up 20%. Meanwhile, AMC Entertainment, another meme stock, went down by 15.2%.
DocuSign experienced a 4.7% loss. The contract management software specialist had posted better-than-anticipated financial results and unveiled a new stock buyback program. Nevertheless, analysts criticized DocuSign for merely meeting expectations and its outlook was less than promising. Vail Resorts suffered a 10.3% decrease. The ski resort operator adjusted its annual forecast due to the recent heatwave.
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Despite the job market improvements and potential increase in interest rates, Wall Street continues to monitor the situation closely. The interest rate policy could impact the stock market's trajectory, given its effect on various sectors such as banking and technology.
Following the announcement of a share split, Nvidia's stock showed some resistance on Wall Street, demonstrating the influence of interest rate policy on investment decisions.
