The NYSE fell on Friday, shedding some of the week’s gains, as investors analyzed a hawkish stance from the Federal Reserve, a cooling in inflation and the strength of the technology sector.
In a context of many doubts, the index Dow Jones of Industrials ended in 38,589.16 points, when going down 0.2%, he S&P 500 was located in the 5,431.60 points after losing 0.04% and the Nasdaq Composite was appreciated 0.1% and reached the 17,688.88 points.
The Federal Reserve in its labyrinth
Data from earlier in the week showed producer prices unexpectedly fell in Mayone day after the consumer’s price index to weaken slightly, increasing optimism that a receding inflation trend was at play, likely leading to lower interest rates by the end of the year.
This helped calm some market jitters around the Fed’s updated monetary policy projections.
Markets have persisted with expectations of a start of policy easing in September (seeing a more than 70% chance of a cut at that meeting), while the operators are pricing in two cuts for the end of the year.
However, that clashed with the central bank’s own forecasts published on Wednesday, where Authorities reduced their projections from three cuts this year to just one.
“Investors think the Fed data was already somewhat outdated,” he said. Ross MayfieldBaird Trust analyst, referring to the inflation data and of weaker consumer prices At the beginning of the week.
Meanwhile, the president of the Cleveland Federal Reserve, Loretta Mesterstated “that the downward trend is good news for the economy and the central bank.
Hopes of easing Fed policy, combined with the strength of mega caps, have caused majors S&P 500 indices and the Nasdaq They will reach a record, in their respective prices.
However, this has generated some Concerns about sustainability of stock strengthespecially if the risks of economic recession increase, with the Dow Jones “that did not follow the same path as the previous two.”
“The market is also pricing in the probability, however small, of a second half of the year with recession, in which the Federal Reserve will have to cut rates significantly,” he said. Mayfield Global Venture Capital.
To add to the unease, a survey of the University of Michigan showed that the consumer hope index fell to 65.6 in June, well below expectations of 72.
Adobe soars after strong earnings
The technology sector has dominated activity this week, extending a rally seen earlier in the week, which was largely driven by the market giant’s announcement Manzana, of an important incursion into the AI.
The announcement of the mega company gave more fuel to the AI rebound and also made its shares briefly become the most valuable company on Wall Street.
This continued on Friday, with shares of Adobe Systems rising 14% after the software giant posted strong profits and raised its 2024 guidance due to higher demand for its AI-powered editing tools.
tesla lost more than 2% after shareholders voted in favor of controversial $56 billion CEO pay package Elon Muskas well as the reincorporation of the company in Texas.
Crude oil in its best week
The crude oil prices rose on Friday, on track for its best week in more than two months on higher hopes for demand growth this year.
US crude futures rose 0.3% to $78.89 a barrel, while the Brent contract fell 0.5% to $83.19 a barrel.
Both benchmarks are up more than 4% this week, the best since April 5.
The Organization of Petroleum Exporting Countries stuck to a forecast of relatively strong growth in global oil demand by 2024, overshadowing a more pessimistic report from the International Energy Agency. Additionally, investment bank Goldman Sachs forecast strong fuel demand in the United States this summer.
Source: Ambito
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