2024-07-10 20:01:49
The New York Stock Exchange set a new record on Wednesday ahead of the release of inflation indexes on Thursday and following assurances from Federal Reserve Chairman Jerome Powell that price developments are moving in the right direction.
The Dow Jones Industrial Average rose 1.09% to 39,721.36, while the tech-heavy Nasdaq Composite Index rose 1.18% to 18,647.45, setting a seventh consecutive record.
The S&P index also hit a new high, rising 1.02% to 5,633.91 points, breaking the 5,600 mark for the first time.
A day before his semi-annual hearing with elected officials on the state of the economy, Federal Reserve Chairman Jerome Powell reiterated his expectations for future monetary policy to Congress following the first segment concluded.
As he did on Tuesday, he said inflation was moving toward his 2% target and said the Fed was no longer focused only on the risk of rising prices but also on the risk of a deterioration in the job market.
The Fed chairman also insisted that there was no question of waiting until inflation returned to 2% before taking action. “By then it will be too late,” he insisted.
“Jerome Powell kept the same tone in September, leaving the door open for a rate cut, and that’s what’s moving stocks,” said Peter Cardillo of Spartan Capital.
“He has clearly signaled to the market that a rate cut will take place in September,” the analyst assured.
Art Hogan of B. Riley Wealth Management estimated that “the probability of a rate cut at the September 18 monetary meeting is 75.2%, compared with 65% last week.”
In the bond market, the yield on the 10-year Treasury bond fell slightly to 4.28% instead of 4.29%, and the issuance of the 10-year Treasury bond was well received.
The key indicator this week is the CPI consumer price index for June, which is released on Thursday.
Analysts forecast growth of 3.1% in one year, instead of 3.3% in May. However, in one month, the index should rise to +0.1% from +0.0% in May.
“Today is a good day because, in general, the market is more hesitant in the run-up to important indicators such as inflation, but on the contrary, it frequently tops,” commented Peter Cardillo.
For Spartan Capital analysts, “if inflation doesn’t deliver any unpleasant surprises, the index might end the week on a very positive note.”
In the market, large-cap stocks continued to support the market, especially Apple, whose share price reached a high of $232.98, up 1.88%. Apple returned to the top of the list of the largest market capitalization companies on Wall Street, ahead of Microsoft.
Nvidia, the designer of generative AI chips, continued to rise, with a gain almost as high as the day before (+2.69%).
Competitors such as AMD (+3.87%), Arm (+2.29%), and Micron Technology (+4.00%) also benefited from the momentum. Its supplier TSMC rose 3.52%.
In distribution, Target fell 1.00% as the chain announced it would no longer accept checks from consumers. DIY stores Lowe’s (+2.03%) and Home Depot (also +2.03%) were in demand.
In financials, Mastercard underperformed (-2.49%) following Bank of America analysts gave it a poor rating. Visa followed the slope (-0.92%).
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