Wall Street is buoyed by new labor market figures.
The number of individuals applying for unemployment benefits in the United States is increasing, and this information is sending ripples throughout the stock market. This is because of the potential for a quick interest rate reduction from the Federal Reserve.
Stocks surged in the US market, pushed higher by predictions of lower interest rates due to recent updates on the US job market. Despite this, some specific companies experienced selling pressure due to underwhelming financial reports. The Dow Jones industrial average finished 0.9% higher at 39,387 points, while the S&P 500 advanced 0.5% to 5214 points, and the technology-focused Nasdaq index jumped 0.3% to 16,346 points.
The number of new claims for unemployment benefits in the US increased slightly last week, reaching 231,000. Experts had anticipated a figure closer to the average of 215,000 from the past four weeks. Peter Andersen, founder of Andersen Capital Management, stated, "When the employment data comes in weaker than expected, it surprisingly supports the market because the information suggests a higher likelihood of a rate cut rather than a rate hike." The Federal Reserve is attempting to control inflation and cool down the hot labor market by raising interest rates.
Shares in Airbnb plummeted by 6.9%, as they reported a decrease in growth in North America. The chip designer Arm also experienced a decline, with their stock falling 2.3%. The outlook for their 2024/2025 financial year didn't meet the expected marks. The US-based meat substitute producer Beyond Meat and the online gaming platform Roblox took a hit, with both companies experiencing decreased spending from customers due to high inflation. Beyond Meat tumbled by 14%, while Roblox suffered a 22% drop.
Tesla's shares slid by 1.6%, with the electric car company implementing further job cuts in China earlier this week, according to rumors. The Chinese economy made headlines as well. Stunningly strong foreign trade data for April pointed to a potential revival in the country. Exports increased by 1.5% year-over-year, while imports grew by 8.4% - surpassing the expected 4.8% rise.
The possibility of a stronger Chinese economy sparked hope in the oil market, as North Sea Brent and US WTI crude rose by 0.7% each, reaching $84.20 and $79.60 per barrel (159 liters), respectively. The drop in US inventories was also a factor in this increase. A drastic reduction in US storage levels occurred as refinery activity picked up in anticipation of surging gasoline demand during the summer vacation season, according to ANZ Research.
PictureBrent Crude Oil
Header table Chinese GDP Data
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The unexpected increase in unemployment claims might lead to a further reduction in interest rates, positively affecting Dow Jones and other share prices during share trading on Wall Street. Despite the overall market rise, notable firms like Airbnb and Beyond Meat saw significant decreases in share prices due to financial report discrepancies and high inflation.
Source: www.ntv.de
