Data eases interest rate fears
Tech rally drives S&P to over 5,000 points
February 9, 2024, 10:58 p.m
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Downwardly revised consumer price data calms US investors’ fears about interest rates. The S&P 500 reaches a new record high. Nvidia ensures that everyone is in a good mood. Things are going downhill for Pinterest.
Price gains in technology stocks largely pushed Wall Street into positive territory at the end of the week. The broad S&P 500 closed above the 5,000 point mark for the first time and moved up 0.6 percent to 5,026 points. The Nasdaq technology exchange index was 1.3 percent higher at 15,988 points. The Dow Jones index of standard stocks was slightly in the red at 38,666 points.
There was a good mood again Nvidia. According to a report, the chip company’s stocks climbed by 3.6 percent. According to insiders, the company is setting up a new business unit to develop tailor-made semiconductors. These chips are intended for cloud computing companies but also other areas, such as advanced processors for artificial intelligence (AI), Reuters learned from nine people familiar with the matter. The world’s leading developer and supplier of AI chips wants to secure part of the booming market for customized AI chips and prepare for the growing number of companies interested in alternatives to its products. Other technology companies such as Microsoft, Amazon and Alphabet gained between 1.6 and 2.7 percent in Nvidia’s wake.
Waiting for inflation data for January
The final US inflation figures for 2023 also contributed to the good mood. According to data from the US Department of Labor, consumer prices in the USA rose by 0.2 percent in November and not by 0.1 percent as previously reported. However, the data for December has been revised slightly downwards. “And now that we know what the final numbers look like, the overall market concern about the inflation situation is much lower,” commented Art Hogan, chief strategist at asset manager B Riley.
Investors now await the release of January inflation figures on Tuesday. They hope this will provide more clarity about the development of consumer prices, which is important for the US Federal Reserve’s future monetary policy. The central bankers are trying to use increased interest rates to bring inflation down from 3.4 percent to their target of two percent without strangling the economy. Strong economic data and statements from Fed officials in recent weeks have dampened traders’ hopes for a first rate cut in March.
The ongoing tense situation in the Middle East has Oil prices lifted into the plus again. The North Sea variety Brent and the light US variety WTI advanced by around half a percent each to 81.99 and 76.51 dollars per barrel (159 liters). This meant they were around seven percent below the previous week’s level. Israel rejected a Hamas proposal for a ceasefire on Thursday and continued its airstrikes on the Gaza Strip afterward.
Pepsi and Pinterest under pressure by numbers
For other companies, the accounting season continued. Among other things, the shares of the IT group were in demand Cloudflare, which shot up by more than 20 percent at its peak. Strong demand for cloud and cybersecurity services helped the company report fourth-quarter sales above experts’ expectations.
However, among other things, came under pressure after weak figures Pepsi. The beverage provider’s shares lost almost 3.5 percent. Several price increases have depressed demand for its products and thus impacted sales. Net sales fell to $27.85 billion in the fourth quarter from $28 billion a year earlier. Analysts had expected an increase to 28.4 billion. They also flew out of the depots Pinterest with a loss of a good ten percent. The company faced competition from Tiktok, Facebook and Instagram in the last few months of 2023.