Wall Street is recovering
US investors on the hunt for bargains
February 14, 2024, 11:33 p.m
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After the previous day’s price slide, the US indices are going up again, with tech stocks in particular celebrating a comeback. In the slipstream of Bitcoin, securities from the crypto sector are also increasing significantly.
The US stock exchanges turned positive in the middle of the week after the heavy price losses from the previous day. The Dow Jones Index the standard values closed 0.4 percent higher at 38,424 points. The technology-heavy one Nasdaq advanced 1.3 percent to 15,859 points. The broad one S&P 500 increased one percent to 5000 points. Among other things, the analysts spoke of a bargain hunt after the indices closed by almost two percent in the red on Tuesday.
New data had pointed to surprisingly sluggish US inflation, raising concerns about the Fed’s future monetary policy in its fight against high inflation. According to Fed Chairman Jerome Powell, investors had already almost written off the first interest rate cut in March at the end of January. Now they also have doubts about monetary policy easing in May. The probability of a change in interest rates in the fifth month of the year is currently estimated at around 40 percent on the futures markets. Before publication it was more than 50 percent. “As a result, no new direction has emerged for the stock exchanges,” said Jochen Stanzl, chief analyst at broker CMC Markets. “However, investors now have an excuse to take profits and help the market undergo a correction that may be long overdue.”
The statements made by Fed President Austan Goolsbee in Chicago, among other things, provided relief. The central banker said that the path back to the inflation target of two percent would still be viable even if the price increase was somewhat stronger than expected. The Fed should therefore not wait too long before cutting interest rates. “I think the inflation trend is still very friendly,” said analyst Dennis Dick of broker Triple D Trading. “Many investors who are still under-invested in this market are taking advantage of the recent price declines to get in.”
Semiconductor industry on the rise
That was also in demand Bitcoin. The cryptocurrency rose in price by up to 4.3 percent to $51,694. It reached its highest level since the end of 2021 and was above the $1 trillion market capitalization mark. “The price dynamics show that a not insignificant number of investors are now simply afraid of missing out,” said Timo Emden from Emden Research. The first exchange-traded Bitcoin funds (ETFs) in the USA, introduced in January, were increasingly having an impact. The Securities and Exchange Commission (SEC) had previously rejected Bitcoin ETFs for a decade due to concerns about market manipulation.
The price surge also made stocks from the crypto universe popular. The stocks on the stock exchange Coinbase Globalthe blockchain farm operator Bitfarms and the crypto miner Riot Platforms, Marathon Digital as well as Bit Digital gained up to 14.3 percent.
The latest news from the technology sector also created a good mood. The chip manufacturer Nvidia temporarily overtook the market capitalization of Google’s parent company alphabet. Nvidia shares rose 2.4 percent, while Google parent company gained 0.5 percent. “If AI is truly going to change the world, then Nvidia is at the forefront,” said Dennis Dick, founder and analyst at broker Triple D Trading. Also Nvidia rivals like AMD and Qualcomm as well as other technology stocks such as Facebook parent Meta gained between 2.5 and 4.1 percent in their wake.
Other companies had rosy earnings prospects for the shares of the ride-sharing platform Lyft shoot up by more than 35 percent. Rival title Above also climbed by almost 15 percent. “David Risher took over as boss less than a year ago and he has clearly shifted gears at the company, cutting costs sharply while maintaining market share,” said Susannah Streeter, an analyst at Hargreaves Lansdown.