Stock market experiences pause in activity
After smashing records at US stock markets, investors have hit the brakes and are strengthening their positions. Despite subtle hints from the Fed, anticipation for two interest rate reductions this year stays high. Nvidia overtook Microsoft as the leading company by market value.
In response to yesterday's record highs, US stock markets are reinforcing their gains. The Dow Jones Index climbed by 0.1 percent to 38,835 points. The S&P 500 dipped by 0.3 percent. The Index reached a new peak, but just marginally greater than the day before. The Nasdaq Composite remained pretty much the same. At the NYSE, there were 1613 winners (previously 1650), while 1206 losers contested them. 58 titles remained static.
The presence of some US Federal Reserve representatives didn't budge the market, as they neither dampened nor aggravated interest rate decrease expectations. Most market participants are still optimistic about two interest rate decreases in the US this year, although the US Federal Reserve merely hinted at this. The hesitancy of investors could also have contributed to this, as US stock markets were closed on Wednesday due to a holiday.
Economic data also failed to give a boost. The much-watched retail sales figures increased by a hair less than forecast in May. The poor data pulled bond yields down, causing returns to drop. A trader commented, "The aggressive monetary policy of the Fed is working. With retail sales, inflation should diminish over the short or long term." Recently, consumer confidence was also lower than expected. The better-than-expected industrial production and capacity utilization had minimal effect on interest rate cut speculation. Consumption plays a more significant role in the economic growth.
Nvidia Takes Lead
Waning market interest impacted the Dollar: The Dollar Index retreated from its daily high and remained steady. Oil prices increased once more, backed by the assumption of increasing demand during the holiday season. Goldman Sachs predicts a moderate price growth in the oil market, with the European Brent crude oil reaching a high of 86 Dollars in August. Currently, a barrel costs around 85 Dollars. The gold price remained fairly stable, sustained by falling bond yields.
Nvidia surged by 3.5 percent to a record high, taking over Microsoft (-0.5%) as the most valuable US company. Apple, also in the technology sector, dropped 1.1 percent. Dell climbed 5 percent, and Micron 3.8 percent. Analysts also see these two companies as beneficiaries of the AI boom, alongside Nvidia. Lennar lost 5 percent. The homebuilder reported higher-than-expected profit and revenue but was disappointing with its outlook. On the earnings call, Lennar clarified its numbers to analysts.
Philip Morris International fell by 0.8 percent. The business sector that makes Zyn-Nicotine pouches stopped sales on its US website. Local authorities in Washington are examining whether the sales ban for flavored products was enforced there. Silk Road Medical jumped by 24 percent. Boston Scientific (+0.2%) is acquiring the company. The transaction is valued at approximately 1.26 billion dollars. La-Z-Boy (+19.4%) surpassed expectations in the last quarter.
Remainder of today's stock market updates can be found here.
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Wall Street analysts are closely watching Nvidia's growth, given its recent lead over Microsoft. This new position could potentially influence the tech sector's interest rate policy discussions on Wall Street.
Despite the Fed's subtle hints, the anticipation for two interest rate reductions this year remains robust in the tech sector, particularly amidst the surge of companies like Nvidia.
