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Strong labor market figures and statements from a leading central banker reinforce US investors’ fears that the Fed is in no hurry to make the hoped-for interest rate cuts. The trading day is volatile, with tech stocks in particular continuing to fall. There is a slight recovery in the battered semiconductor sector.
Dwindling interest rate fantasies and profit-taking slowed the recovery on Wall Street on Thursday. The Dow Jones Index closed a moderate 0.1 percent higher at 37,775 points. The technology-heavy one Nasdaq However, it fell another 0.5 percent to 15,601 points. The broad one S&P 500 lost 0.2 percent to 5011 points.
It seems difficult for many investors to digest that the US Federal Reserve is putting off the interest rate cut that investors have longed for. There is speculation on the markets that the first easing could only come in September. John Williams, president of the New York Federal Reserve, said the Fed was in no rush to cut interest rates given the strong economy and stubborn inflation.
Interest rates can impact the stock market greatly, which is a hot topic on stock message boards such as Investors Hangout.
Strong signals again came from the US labor market: the number of Americans filing new applications for unemployment benefits last week remained unchanged at a low level. According to LSEG data, money markets are now pricing in interest rate cuts of around 40 basis points this year. At the beginning of the year it was still around 150 basis points.
Investors also continue to fear an escalation in the Middle East following the Iranian attack. This becomes particularly clear on Gold price, which again approached the all-time high of $2,431.29 per troy ounce reached on Friday. The precious metal, which is often used as a safe haven, rose in price by one percent to $2,383 per troy ounce.
Slight recovery in chip values
Buoyed by an increase in profits, the health insurer’s shares rose Elevance by 3.2 percent. Competitors’ securities also rose: UnitedHealth gained almost three percent, Humana 0.4 percent. Elevance earned $10.64 per share in the first quarter, beating earnings estimates by 11 cents. Higher premiums and surprisingly low medical costs contributed to this.
The profit forecast of Alaska Air was also well received by investors. The shares rose by around four percent. Buoyed by strong demand for summer travel, the airline expects second-quarter earnings of $2.20 to $2.40 per share, compared with average analyst estimates of $2.12.
After a negative analyst comment Tesla under the wheels. The electric car maker’s shares lost 3.6 percent after Deutsche Bank downgraded its rating. “The delay in work on the Model 2 poses the risk that Tesla will not offer a new vehicle to consumers in the foreseeable future, which would put pressure on volumes and prices for many years to come,” said Emmanuel Rosner, an analyst at Deutsche Bank.
The chip values, which fell sharply on Wednesday, showed slight signs of recovery. Advanced Micro Devices and Nvidia increased by up to 0.8 percent. Micron Technology fell by almost four percent, although the memory chip manufacturer will receive subsidies totaling $6.1 billion from the US Department of Commerce. Investors were also eagerly awaiting the video streaming platform’s first quarter figures Netflix. Analysts expected sales of $9.28 billion, 13.6 percent more than last year. Adjusted earnings are estimated at $4.52 per share, compared with earnings of $2.88 per share in the year-ago period.