Stock markets on Wall Street are doing well, with the S&P 500 index hitting its highest level since February, driven by technology stocks, and the Nasdaq index rising nearly 2%. Expectations of interest rate cuts have grown, market sentiment has turned better before the start of the earnings season, cryptocurrencies continue to rise, and Ethereum has risen above the $2,000 level for the first time this year.
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Market conditions on April 13 (Thursday)
l The Dow Jones Industrial Average rose 383.19 points, or 1.14%, to 34,029.69 points.
l The S&P 500 rose 54.27 points, or 1.33%, to 4,146.22.
l Nasdaq rose 236.93 points, or 1.99%, to 12,166.27 points.
l Oil futures for May delivery in New York closed at $82.16 a barrel, down $1.1 or 1.3%.
l Gold futures for June delivery in New York closed at $2,055.3 an ounce, up $30.4, or 1.5%.
l The US 10-year Treasury yield closed at 3.653%, up 3.2 basis points.
Large-scale technology stocks outperformed the market. Amazon, which has recently lagged behind, joined the artificial intelligence race and launched the AI platform Bedrock. The stock price fell 4.6%. Apple, Microsoft, Meta, Alphabet, and Tesla rose 2% to 3%. Research estimates that Tesla’s first-quarter U.S. luxury car sales soared 55% year-on-year to 170,000 units, more than double that of second-placed BMW. Streaming platforms surged, with Netflix up 4.5%. Chip stocks were eclipsed, and Nvidia and AMD were weak against the market.
Cryptocurrency-related stocks are doing well, Marathon Digital is up 15% and MicroStrategy is up 50%.
There is another data to support the slowdown of US inflation. In March, the producer price index (PPI) unexpectedly fell by 0.5% month-on-month, and the core index excluding food and energy fell by 0.1% month-on-month. The market originally expected to rise.
In addition, the number of new jobless claims increased by 11,000 to 232,000 last week, the first increase in three weeks, higher than expected. There are signs of loosening in the labor market, and the minutes of the Federal Reserve’s interest rate meeting released the previous day showed that officials expected the banking crisis to lead to a recession this year, increasing the market’s expectations for interest rate cuts, which is especially good for technology-related stocks.
However, Ian Shepherdson, chief economist at Pantheon Macroeconomics, pointed out that the meeting was held in mid-March when the banking crisis was in full swing. As time went on, he doubted whether the data in the next month or two would continue to support the officials’ related views.
Megan Horneman, chief investment officer at Verdence Capital Advisors, isn’t convinced by the market’s optimism about rate cuts either. “I think the Fed is going to keep rates high for longer than people think. It may start cutting rates next year, but right now inflation is still tricky.”