Market Mood Brightens, Wall Street Bullish Amid Fed Rate Speculation
Stock Market Persists in Bullish Trend
As US President Trump continues to push for lower interest rates, buzz about an imminent cut in July gains ground on Wall Street. Investors are brushing aside Middle Eastern concerns and are buy-in frenzy.
US stock markets witnessed a positive trend on Thursday. The day started with a tentative approach, but buying power soon took the lead, resulting in an upward momentum over the past four trading days. The Dow Jones Index climbed by 0.9 percent to 43,387 points. The S&P-500 and Nasdaq indices improved by up to 1.0 percent. Although the Nasdaq Composite and the S&P-500 Index are just short of their record highs, the Nasdaq-100 Index has already surpassed it. According to initial counts, there were 2,203 gainers and 568 losers on the NYSE. 53 titles remained unchanged.
With the Middle East drama fading, investors shifted focus to other topics, such as monetary policy and interest rate projections. In the futures market, discussions about interest rate cuts as early as July popped up. The probability of such a move was roughly 20 percent, compared to about 13 percent a week ago.
Economy
The Puppetmaster Trump Targets Fed Chief Powell
In defiance of US central bankers' plans to move slowly and carefully because the influence of trade policy on inflation is in question, Trump keeps demanding lower interest rates. Now, he seems to be intensifying pressure by hastening the appointment of Powell's successor. With the newcomer, he could steer expectations about monetary policy with suitable remarks during Powell's remaining eleven-month term.
A slew of new or revised economic indicators showed signs of strength. US orders for durable goods jumped up in May more than anticipated. The number of weekly initial jobless claims fell more than expected. However, the US GDP growth in the first quarter was revised down to 0.5 percent from 0.2 percent in the third reading.
Greenback Weakens, Euro Flourishes
The interest rate cut conjecture and concerns about the Fed's autonomy kept the dollar in check. The euro surged past the 1.17 mark, last trading at 1.1701 dollars. The Dollar Index slipped by 0.4 percent. US Treasury yields slid again, down by 3 basis points to 4.26 percent in the ten-year sector.
Oil prices received backing from lower weekly US oil inventories, according to traders, but couldn't hold on to their daily highs. US oil of the WTI variety gained 0.7 percent. Gold showed little movement.
Tech Titans Ride High
Micron Technology surpassed expectations with its third-quarter results and outlook for the current quarter. However, its stock dipped by 1.0 percent. Analysts attribute this downturn to previously high expectations. Micron has gained appreciably since the start of the year.
Nvidia, which touched a new all-time high on Wednesday, continued to grow by 0.5 percent. With a market cap of around $3.8 trillion, Nvidia has overtaken Microsoft as the most valuable company. Apple slumped behind with a 0.3 percent slide after JP Morgan lowered its price target, although it is well above the current level. Meta Platforms gained 2.5 percent on the day. In a bid to further its AI initiatives, Meta CEO Zuckerberg has lured three top experts from OpenAI to his team.
Tesla shares dropped by 0.6 percent following reports that Tesla has parted ways with a key ally of CEO Elon Musk, Omead Afshar, who handled sales and production in North America and Europe.
H.B. Fuller skyrocketed by 10.8 percent after raising its full-year outlook following impressive quarterly results. Kratos Defense & Security Solutions suffered due to plans for a capital increase, resulting in a 2.4 percent stock slump. Worthington Steel reported increased profits despite declining revenues, sending its stock soaring by over 20 percent. Meanwhile, Jefferies reported lower quarterly revenues and profits, missing expectations, but its stock rose by 0.3 percent. Walgreens Boots Alliance improved by 0.6 percent after boosting sales in the reporting quarter.
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Sources: ntv.de, mau/DJ
- Wall Street
- Fed
- Jerome Powell
- Monetary Policy
The focus of investors is shifting away from Middle Eastern concerns and towards monetary policy and interest rate projections, such as the possibility of an interest rate cut as early as July, with discussions about this move becoming more prevalent in the futures market.
In light of US President Trump's demands for lower interest rates and his efforts to speed up Jerome Powell's successor's appointment, the potential impact of trade policy on inflation becomes a question. This could lead to changes in monetary policy and the employment policy of various businesses, including the community policy of some organizations. Over the long term, this could influence investing strategies and potentially impact the overall financial health of the economy.
