The Dow Jones lost 0.31% to 38,592 points, the S&P 500 gained 0.30% to 5,437 points, and the Nasdaq advanced 0.59% to 17,710 points.
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Wall Street comes from a good session for the S&P 500 and Nasdaq, with each index hitting all-time highs. The Standard & Poor’s registered an advance of 0.85%, while the Nasdaq 10, with a strong technological component, rose 1.33%. Both indices were supported by the great performance of large technology stocks, especially Apple and NVIDIA. The Dow, for its part, closed with a slight decrease of 0.09%.
Investors were optimistic after the Federal Reserve acknowledged that it had made “modest additional progress” toward its 2% inflation target, although it left rates unchanged.
In the dot plot where FOMC members express their expectations for official medium-term interest rates, officials They reduce the potential reductions from three to one in 2024, while those in 2025 increase from three to four. “Overall, FOMC members now expect one less rate cut in the next year and a half than they did in Marcha consequence of having revised upwards its inflation expectations both for 2024 and 2025,” he points out. Juan J. Fdez-Figares, of Link Securities.
They also add that, in their new projections, The Fed kept its growth expectations for the US economy unchangedwhile slightly increases unemployment rates. At a press conference, Jerome Powell simply reiterated that Before starting to lower rates, FOMC members must be convinced that inflation is clearly heading towards the 2% objective.
The cooling of the CPI in May raised hopes that inflation will ease. Treasury yields plunged following the report, with the 10-year bond falling to its lowest level since April 1. At this time, the benchmark bond yield recovers slightly to 4.312%.
“The Federal Reserve kept its monetary policy unchanged, but continues to keep the door largely open to rate cuts this year,” said James McCann, deputy chief economist at abrdn. “Today’s downward surprise in CPI inflation was more encouraging, and with most members split between one or two cuts we wouldn’t be surprised to see market prices still flirting with multiple rate cuts this year.”
On today’s macroeconomic agenda, The producer price index (PPI) brings good news to investors: it fell 0.2% in May compared to April, when analysts had expected an increase of 0.1%. In a year-on-year rate, wholesale inflation rose 2.2%.
The core PPI – which excludes energy and fresh food prices to avoid the distortions that these components usually cause given their high volatility – showed no change in month-on-month terms, after an increase of 0.5% in April. In a year-on-year comparison, the core PPI rose 2.3%, after an increase of 2.4% in April.
The usual weekly figures for initial applications for unemployment benefits, which rose to 242,000, above the expected 225,000 and last week’s 229,000.
On the business side, Broadcom shares soared 14% after it beat expectations for the fiscal second quarter and announced a 10-for-1 stock split.
The chipmaker obtained Adjusted earnings of $10.96 per share on revenue of $12.49 billion. Analysts surveyed by LSEG had forecast earnings per share of $10.84 on revenue of $12.03 billion.
Tesla shares rise more than 7% in the early stages of trading after Elon Musk said in a post on X that shareholders are close to approving his massive $56 billion pay package. It also indicates that another resolution to move the electric car maker’s incorporation to Texas from Delaware is headed for approval.
In addition, the company confirms that it will likely increase prices in Europe for its Model 3 vehicle from July 1, after the European Union moved forward with the imposition of higher provisional tariffs on electric cars imported from China.
Dave & Buster’s Entertainment shares fell 8.6% after its quarterly revenue fell short of expectations. The restaurant and entertainment business posted revenue of $588 million in its first quarter, missing the LSEG consensus estimate of $621 million.
Oxford Industries falls 4% after disappointing with its earnings report. Tommy Bahama’s parent company posted adjusted earnings of $2.66 per share on revenue of $398.2 million. Analysts had forecast earnings of $2.68 per share and $404.8 million in revenue. Forecasts for the current quarter and full year were also softer than Wall Street expected.
As for analyst recommendations, good news for Kimberly-Clark, which sees Bank of America improves its advice by two steps to ‘buy’. The firm believes that the company behind Huggies diapers or Kleenex is about to see structural changes.
Shares of the space tourism company Virgin Galactic, founded by billionaire British businessman Richard Branson, plummeted 12% after it reported that its board of directors had approved a 1-for-20 contra split of its shares.
In the raw materials market, oil prices They are trying to stabilize as investors digest that the Federal Reserve is likely to postpone the first rate cut until December, while the country’s abundant crude and fuel stocks also weigh on the market.
In this way, crude oil futures Brenta reference in Europe, rose 0.30%, to $82.86 per barrel, and crude oil futures West Texas Intermediate of the US advance 0.24%, to 78.69 dollars. Both benchmarks had gained around 0.8% in the previous session.
The euro fell 0.13% against the dollar, after yesterday’s increases, establishing the exchange rate at 1.0796 dollars for each single currency.
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