US indices bounce back after setback
After the profit-taking of the previous day, investors on Wall Street are coming out of hiding again. Weak economic data is fueling hopes that interest rates will be cut soon. Among the individual stocks, chip manufacturer Micron is particularly in demand.
Interest rate hopes among US investors following new economic data lifted Wall Street into positive territory on Thursday. The Dow Jones index of blue chips closed 0.9 percent higher at 37,404 points. The technology-heavy Nasdaq advanced 1.3 percent to 14,963 points. The broad-based S&P 500 gained one percent to 4746 points.
US gross domestic product (GDP) did not grow quite as strongly as expected in the summer. This reinforced investors' hopes that the Fed could soon initiate the first interest rate cuts. The monetary authorities are attempting to curb inflation with higher interest rates without putting too much pressure on the economy. "The economic data points to a slowdown," said Peter Cardillo, chief economist at financial services provider Spartan Capital Securities. However, he was cautious. "Markets are going up because yields are going down, and yields are going down because the market is assuming really weak economic activity next year and that the Fed will cut rates."
Dollar under pressure
The yield on ten-year US bonds fell to as low as 3.829 percent from 3.877 percent on Wednesday in response to the rising rate. Hopes of falling interest rates also put pressure on the greenback. The dollar index fell by 0.6 percent to 101.79 points. In contrast, the European single currency, the euro, gained 0.6 percent to 1.1003 dollars.
Meanwhile, oil prices initially fell again following Angola's withdrawal from Opec. North Sea Brent and light US WTI crude fell by 0.3 per cent to 79.45 and 73.98 dollars per barrel (159 liters) respectively. Membership of the Organization of the Petroleum Exporting Countries is not in the national interest of the African country, said Oil Minister Diamantino Azevedo in a televised address. Furthermore, Angola did not play a relevant role within the energy cartel. If it were to remain a member, sooner or later it could be forced to cut production. This would run counter to the country's goals.
Among the individual stocks in demand were Micron. The chip manufacturer's share price climbed by almost nine percent. The strong demand for memory chips for artificial intelligence (AI) makes the company optimistic about the future. The company therefore expects sales of around 5.3 billion dollars in the second quarter. Analysts had assumed an average of 5.03 billion.
However, the prospect of a multi-billion dollar merger in the US media and entertainment industry did not go down well with investors. Shares in Warner Bros Discovery and Paramount Global lost between 1.5 and 2.8 percent. According to insiders, talks between the industry giants about a merger are still at an early stage.
Meanwhile, investors stocked up on shares in electric car manufacturer Tesla. According to a media report, the US government is considering higher tariffs on some goods from China, including electric vehicles. This was reported by the Wall Street Journal, citing people familiar with the matter. According to the report, a review of the tariffs is to be completed early next year. Tesla shares advanced by just under three percent.
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Stock traders on Wall Street saw an opportunity with the interest rate hopes and focused on tech stocks, driving up the Share prices of companies like Micron. As a result, the Dow Jones index closed 0.9% higher at 37,404 points.
The positive sentiment in the stock market also influenced the currency market, with the dollar index seeing a decrease due to lower interest rate expectations.
Source: www.ntv.de
