Stock market plummets on dark gathering night
Wall Street specialists show caution due to the monetary policy of the Federal Reserve, with certain analysts forecasting a drop in tech stocks.
For the week, the US markets ended with negligible changes. The Dow Jones Index concluded almost flat at 39,150 points. The S&P 500 and Nasdaq Composite shed approximately 0.2 percent each. The market was dominated by the large options expiration day, also known as the "Great Deliveries," where options and futures on indices and individual stocks expired. The NYSE recorded 1,300 (Thursday: 1,359) winners and 1,501 (1,442) losers. 75 (92) stocks remained unchanged.
On the economic front, S&P Global's purchasing manager indices for the manufacturing and services sectors indicated a robust recovery of the US economy in June. However, the index of leading indicators decreased more than expected in May. Home sales showed a decline in the prior month, but less than estimated.
Market players were anxious about the technology sector, which weakened the previous day following the latest surge. "Profiltaking was observed after the AI boom drove the S&P-500 and Nasdaq to record highs. The market corrections do not seem to signify anything significant other than investors cashing out some profits," explained analyst Sophie Lund-Yates of Hargreaves Lansdown. However, there were also more bearish voices predicting a correction in the technology sector. "The optimism that artificial intelligence will boost corporate earnings must eventually deliver tangible evidence," was the prevailing sentiment in the market.
Yields inch down slightly
The bond market received some inflows due to the falling stock prices, but the inflows were kept in check due to the better economic data. Yields made only minor adjustments. Observers mainly pointed to the unexpectedly weak housing data, as the data on building permits and starts surprised on the downside on Thursday.
The weak European data and falling interest rates in Europe affected the Euro, while the Dollar was supported by the US economic data. The Dollar Index increased by 0.2 percent. The stronger Dollar once again put pressure on oil and gold prices.
Nvidia loses territory
The focus was on AI high-flyer Nvidia. The stock experienced profiltaking the previous day after hitting a new record high. On Friday, it lost another 3.2 percent. Nvidia accounted for roughly one-third of the S&P-500 Index's gains in this month prior to the decline on Thursday.
Among individual stocks, Sarepta Therapeutics stood out with a 30 percent spike. The catalyst was the approval of a gene therapy by the US Food and Drug Administration (FDA). Trump Media & Technology Group rebounded by 3.4 percent after its nearly 15 percent drop the previous day. The parent company of the Truth Social platform of former President Donald Trump lost approximately 30 percent of its value during the week. The US Securities and Exchange Commission (SEC) approved the registration statement of the company, as well as the sale of shares and certain warrants (Warrants) during this week.
Gilead Sciences boosted profits by an additional 3.2 percent following successful study results. Smith & Wesson Brands, on the other hand, slid by 12.6 percent. According to CFO Deana McPherson, Smith & Wesson anticipates significant sales decreases in the first quarter. CarMax gained 0.4 percent, the used car dealer presented impressive first quarter figures surpassing market expectations.
Everything else about today's stock market developments can be found here.
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Fed's interest rate policy is causing uncertainty on Wall Street, with some analysts suggesting it could impact tech stocks similarly to how it affected the Dow Jones recently.
The Federal Reserve's monetary decisions are being closely watched by Dow Jones investors, as any changes in interest rates could significantly impact the tech sector, which has been a major driver of the index's performance.
