US stock markets close weaker
Investors hope for Meta’s “Twitter killer”
07/05/2023, 11:05 p.m
Wall Street comes out of the holiday break rather leisurely. Investors stay hidden ahead of major economic data releases, with the release of the latest Fed minutes offering no surprises. Meta’s announced Twitter competitor is causing a stir.
The US stock exchanges resumed trading on Wednesday after the holiday break with slight discounts. Sentiment was dampened by Chinese economic data and export controls for certain commodities needed in the chip sector. The Dow Jones lost 0.4 percent to 34,289 points. The tech-heavy one Nasdaq fell 0.2 percent to 13,792 points and the broad S&P 500 also lost 0.2 percent to 4447 points.
The publication of the minutes of the last US central bank meeting during trading played a secondary role on Wall Street. As Fed Chair Jerome Powell already announced after the meeting at the end of June, most of his colleagues still see room for improvement in interest rates. However, according to the minutes, most Fed executives found it appropriate or acceptable to hold interest rates on hold for the time being. With the interest rate pause, they want to gain time to be able to assess the economic progress on the way to the inflation target of around two percent.
“Investors understandably don’t want any more increases, but would grudgingly accept two more steps,” said Jochen Stanzl, analyst at broker CMC Markets, before the publication. “But there is a kind of red line there: more than these two increases should therefore cause turbulence on the stock market.” According to experts, the focus on the market is now on upcoming US economic data, especially on Friday on the labor market.
Meanwhile, China’s service activities grew at the slowest pace in five months in June, raising investor concerns about a global economic recovery. Chip manufacturers recorded discounts. shares of Micron Technology lost nearly 2.9 percent. As announced by the Ministry of Commerce in Beijing, companies must apply for a license for the export of gallium and germanium products from August 1st.
Economic concerns pushed commodity prices down. The price of the North Sea crude oil grade Brent recouped initial losses to trade 0.5 percent higher at $76.66 a barrel (159 liters). The price for the US variety was significantly higher STI, which was three percent higher at $71.91 a barrel. However, traders did not attribute this discrepancy to fundamental reasons. Rather, market technology plays a role after there were no settlement prices for contract valuation due to the US holiday on Tuesday.
Advance credit for meta
The upcoming launch of a new short message service in competition to Twitter brought Meta Price gains of 2.9 percent. “Investors can’t help but get a little excited at the prospect of Meta actually launching a ‘Twitter killer’ on the App Store,” said Danni Hewson of analyst firm AJ Bell. Since the takeover by Elon Musk in autumn 2022, Twitter has not calmed down. The billionaire has repeatedly alienated users and advertisers – most recently with the announcement that he would limit the number of messages read per day on Twitter. Meta wants to start its new service “Threads” on Thursday. Instagram users should not need separate access. With Facebook Messenger, Instagram Messenger and WhatsApp, the meta group already has a portfolio of services for exchanging text messages.
shares of Moderna rose by almost 1.5 percent in the hope of lucrative business with China. The biotechnology company struck an agreement to research, develop and manufacture mRNA drugs in China.