Wall Street: Nasdaq and S&P 500 at record highs awaiting Fed rate announcements

The S&P 500 and Nasdaq indices trade at record highs this Tuesday, July 9driven by semiconductor and mega-cap stocks and in reaction to remarks by the president of the Federal Reserve (Fed)Jerome Powell, before the US Congress. The official welcomed the recent data from the Inflation in the northern country and said that if the good data continues to come in, it will become clearer when to lower interest rates.

Powell stated in his appearance before Congress that, although inflation “remains above” the soft landing target of 2%, has improved in recent months and “more good data will strengthen” the arguments in favor of lowering rates.

Thus, the Industrial Average The Dow Jones lost 147.89 points, or 0.38%, to 39,196.90 units; the S&P 500 gained 11.96 points, or 0.21%, to 5,584.81 units, and the Nasdaq Composite rose 86.31 points.or 0.47%, to 18,490.05 units.

Nvidia, the darling of artificial intelligence (AI) chips, soars 4%while Applied Materials and Micron Technology rose 2% and 3%, respectively, driving the Philadelphia SE Semiconductor Index to an all-time high.

The S&P 500’s information technology sector is also trading at record levels, along with mega-cap stocks such as Alphabet and Apple, while Meta Platforms and Amazon.com rose 0.9% and 0.3%, respectively.

Artificial intelligence drives the S&P500

On the eve, S&P 500 posted its 35th record close of the year, boosted by strong AI-linked gains and other technology stocks, offsetting uncertainty surrounding the Fed’s rate cut path.

Meanwhile, the Dow Jones fell, weighed down by a 2% decline in Salesforce.

“It seems that Powell is looking for a few more months of decent inflation data to have the confidence to start cutting, which could put a rate cut in September into play,” said Brian Jacobsen of Annex Wealth Management.

The investors They welcomed Powell’s decision to cut rates following evidence that the US labor market is cooling.

Powell is scheduled to appear before Congress on Tuesday and Wednesday for a hearing to consider whether recent signs of cooling inflation and a slowing labor market will lead the central bank to accelerate its plans to cut interest rates.

Investors are betting on lower rates

After what Powell said, Investors are betting that recent weak labor market data has raised the likelihood of a cut rates in September to around 80%.

Eurozone bond yields are also up ahead of Powell’s testimony. The yield on the 10-year German bond, the eurozone bloc’s benchmark, was up 1 basis point at 2.53%.

Japan’s Nikkei index rose 1.96 percent to a record high, supported by semiconductor stocks and a falling yen, which boosted Japanese companies’ overseas profits.

Source: Ambito

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