U.S. stocks reached new all-time highs on July 4, 2024, with the S&P 500 climbing to 5,547 points and the Nasdaq surging to 20,220 points. However, the Dow Jones Industrial Average retreated to 39,300 points. The market's enthusiasm was fueled by weaker economic data and expectations of possible interest rate cuts by the Federal Reserve [6d8dc070].
The movements in the stock market were influenced by remarks from Federal Reserve Chairman Jerome Powell suggesting that inflation might be slowing down. The Fed's June meeting minutes revealed a cautious approach to interest rate cuts, with rates remaining in the 5.50% range. Some members of the Federal Open Market Committee (FOMC) expressed the need for additional rate hikes if inflation resurges [6d8dc070].
The market's sensitivity to economic data and monetary policy signals highlights the potential for volatility and uncertainty in the coming months [6d8dc070].
U.S. stocks rose to more records on July 5, 2024, after a highly anticipated report on the job market bolstered Wall Street's hopes that interest rates may soon be lowered. The S&P 500 climbed 0.5% to set an all-time high for a third straight day. The Dow Jones Industrial Average rose 67 points, or 0.2%, while the Nasdaq composite added 0.9% to its own record. The action was more decisive in the bond market, where Treasury yields sank following the U.S. jobs report. The data reinforced belief on Wall Street that the U.S. economy's growth is slowing under the weight of high interest rates. The clearest takeaway from the jobs report for financial markets was that it keeps the Fed on track to cut its main interest rate later this year, likely in September and perhaps again in December. The hope is that the Fed will lower interest rates early and significantly enough to keep the economic slowdown from sliding into a recession, but not so much that it allows inflation to regain strength and take off again. On Wall Street, gold miner Newmont rose 2.4% for one of the larger gains in the S&P 500. It benefited from a rise in the price of gold, which usually strengthens when interest rates fall. Gains for some big, influential stocks also helped support the market, even though the majority of stocks within the S&P 500 fell. Meta Platforms jumped 5.9%, and Apple added 2.2%. Amazon rose 1.2% after the announcement of a deal where the parent company of Saks Fifth Avenue will buy Neiman Marcus Group for $2.65 billion. Coinbase Global slipped 0.6%, and Robinhood Markets fell 1%. All told, the S&P 500 rose 30.17 points to 5,567.19. The Dow Jones Industrial Average added 67.87 to 39,375.87, and the Nasdaq composite gained 164.46 to 18,352.76 [cc6dc7fa].
U.S. stocks are rising toward more records after a highly anticipated report on the job market bolstered Wall Street's hopes that interest rates may soon get easier. The S&P 500 was 0.4% higher and on track to set an all-time high for a third straight day following Thursday's pause in trading for the Fourth of July holiday. The Dow Jones Industrial Average was edging up by 14 points, or less than 0.1%, as of 2:30 p.m. Eastern time, and the Nasdaq composite was adding 0.8% to its own record. The action was more decisive in the bond market, where Treasury yields sank following the nuanced U.S. jobs report. Employers hired more workers last month than economists expected, but the number was still a slowdown from May’s hiring. Plus, the unemployment rate unexpectedly ticked higher, and the U.S. government said hiring in earlier months was lower than it had previously indicated. Altogether, the data reinforced belief on Wall Street that the U.S. economy’s growth is slowing under the weight of high interest rates. That’s precisely what investors want to see, because a slowdown would keep a lid on inflation and could push the Federal Reserve to begin cutting its main interest rate from the highest level in two decades. The clearest takeaway from the jobs report for financial markets was that it keeps the Fed on track to cut its main interest rate later this year, likely in September and perhaps again in December. The two-year Treasury yield, which closely tracks expectations for Fed action, fell to 4.60% from 4.71% late Wednesday. The yield on the 10-year Treasury, which is the centerpiece of the bond market, fell to 4.27% from 4.36% late Wednesday and from 4.70% in April. Friday’s jobs report follows a mass of data showing a slowdown across the U.S. economy. Reports earlier this week said business activity in both the U.S. services and manufacturing sectors contracted last month, turning in weaker readings than economists expected. And U.S. shoppers at the lower end of the income spectrum have been showing how difficult it is to keep up with still-rising prices, as balances owed on credit cards have been hitting record highs. On Wall Street, gold miner Newmont rose 2.2% for one of the larger gains in the S&P 500. It benefited from a rise for the price of gold, which usually strengthens when interest rates fall. It's the flip side of when rates are rising and bonds are paying higher yields, which can pull investors away from gold, which pays its holders nothing. Gains for some big, influential stocks also helped support the market, even though the majority of stocks within the S&P 500 fell. Meta Platforms rose 4.9%, and Apple added 1.7%. Amazon rose 1.2% after the announcement of a deal where the parent company of Saks Fifth Avenue will buy Neiman Marcus Group for $2.65 billion. Amazon will hold a minority stake in the deal. On the losing end of Wall Street were companies tied closely to cryptocurrency activity, as bitcoin briefly tumbled below $54,000 from nearly $63,000 early this week. The cryptocurrency's value is roughly back to where it was in February. Coinbase Global slipped 0.8%, and Robinhood Markets fell 1.1%. In stock markets abroad, London’s FTSE 100 fell 0.5% after U.K. voters ushered in a new regime by throwing out Conservatives in this week’s election. Germany’s DAX rose 0.1% after the government agreed on a budget for 2025 and a stimulus package for Europe’s largest economy, ending a monthslong squabble that threatened to upend Chancellor Olaf Scholz’s center-left coalition. The tech-heavy Nasdaq and benchmark S&P 500 indexes jumped to record highs on Friday, as most megacap stocks hit all-time highs following new data that signaled U.S. labor market weakness and pulled Treasury yields lower. Microsoft, Meta Platforms, Amazon.com, and Apple advanced by 1.2%-4.9% to record peaks. Labor Department data showed U.S. job growth slowed marginally in June, and the unemployment rate rose to an over 2-1/2-year high, while wage gains slowed. Odds of the U.S. central bank delivering its first rate cut in September jumped to 79% from 66% seen before the data, CME's FedWatch Tool showed. [54ae9b3e].
U.S. stocks reached all-time highs as investors anticipate interest rate cuts. The ISM Services PMI contracted in June, hitting its lowest level since May 2020. The U.S. job market showed better-than-expected employment growth in June, but downward revisions for April and May, along with an uptick in the unemployment rate and slower wage growth, indicate cooling conditions. Technology and consumer discretionary stocks performed well, driven by rate-cut expectations. The top seven tech stocks, including NVIDIA, Alphabet, Meta Platforms, and Tesla, reached a combined market cap of over $16 trillion. Tesla had its best week in terms of market performance since January 2023. Tesla's energy division received praise for its strong performance and potential growth. Veteran investor Ed Yardeni warns of an inflating bubble in the AI market. Bitcoin experienced its worst trading week since August 2023, entering a bear market. Goldman Sachs highlights 10 reasons why stock risks may rise in the second half of 2024. [b623bdec]