The Nasdaq hit 17,000 as market volatility continued. – Prediction – May 30, 2024

On Tuesday, the Nasdaq hit 17,000 for the first time on a big rise in Nvidia shares, the S&P 500 rose slightly and the Dow Jones Industrial Average fell as Treasury yields rose.

Shares of Nvidia (NVDA.O) rose 7%, while shares of other chipmakers also rose as traders returned to the market after a long weekend. The semiconductor index (.SOX) rose 1.9%.

The Technology (.SPLRCT) sector of the S&P 500 had the biggest gains, while Healthcare (.SPXHC) and Industrials (.SPLRCI) had the biggest declines.

Current stock market conditions were further exacerbated by a rise in US Treasury yields, which hit their highest level in weeks after unsatisfactory results from an auction to sell government bonds.

“We experienced two failed auctions that drove bond yields higher and caused a negative stock market reaction,” said Quincy Crosby, chief global strategist at LPL Financial in Charlotte, North Carolina.

He added: “Markets are discouraging bond yields from rising to levels that could threaten economic stability and consumer demand and hinder the Fed’s policy easing plans.”

Investors this week are eagerly awaiting new data on US inflation. This could have a significant impact on the Fed’s forecast of interest rate changes.

The United States’ key personal consumption price index report for April is scheduled to be released this week. This key measure of inflation, which the Federal Reserve uses in its decision-making, is expected to show stability from month to month.

The Dow Jones Industrial Average (.DJI) fell 216.73 points, or 0.55%, to 38,852.86. Meanwhile, the S&P 500 (.SPX) index rose slightly by 1.32 points (0.02%) to 5,306.04, and the Nasdaq Composite Index (.IXIC) closed at 17,019.88, up 99.09 points (0.59%).

Wall Street continued to set records as investors anticipated a rate cut from the Federal Reserve.

Expectations about the timing of interest rate cuts continue to fluctuate, and policymakers remain cautious as economic indicators continue to show significant inflation.

According to the CME FedWatch tool, the likelihood of a rate cut of at least 25 basis points is more than 50% in November and December of this year alone. In September, that number fell to about 46% from more than 50% the previous week.

Market attention is focused on retail, especially with upcoming reports from major retailers including Dollar General (DG.N), Advance Auto Parts (AAP.N) and Best Buy (BBY.N).

Starting Tuesday, U.S. stock markets will begin a transition to shorter settlement cycles. Regulators hope this will reduce risk and improve operational efficiency, but the transition is expected to initially increase the number of failed deals among investors.

Shares of Apple (AAPL.O) rose after iPhone sales in China rose 52% in April from a year earlier, according to Reuters calculations based on industry data. However, as trading closed, the stock’s gains slowed and it closed at $189.99, slightly above its previous level.

GameStop (GME.N) shares rose 25.2% to close the day at $23.78 after the company announced Friday evening that it had raised $933 million by selling 45 million shares in a “market” offering.

Shareholders of Hess (HES.N) approved a merger with Chevron (CVX.N) worth $53 billion. Hess shares rose 0.4%, Chevron shares rose 0.8% and Exxon Mobil (XOM.N) shares rose 1.3%.

On the Nasdaq, decliners outnumbered advancers by a ratio of 1.34 to 1. On the NYSE, the ratio was 1.75 to 1.

The S&P 500 recorded a high of 24 and a low of 11 this year, while the Nasdaq Composite Index recorded a high of 93 and a low of 107.

Volume on US exchanges reached 11.91 billion shares, slightly below the average of 12.32 billion shares recorded over the past 20 trading days.

U.S. Treasury yields rose after a failed bond auction. It also got a boost when U.S. consumer confidence showed an unexpected improvement in May, helped by optimism about the labor market, which had been contracting for the past three months.

Meanwhile, U.S. home price growth slowed sharply in March as rising mortgage rates pressured demand.

Commenting on the situation, a Goldman Sachs analyst said, “The market is anxiously awaiting confirmation of a slowdown in inflation relative to the Fed’s target.”

The MSCI Global Stock Index .MIWD00000PUS fell 1.28 points, or 0.16 percent, to 792.07.

The European STOXX 600 index (.STOXX) closed down 0.6%. Treasury yields rose after two failed government debt auctions raised doubts about demand for U.S. government debt, while investors also weighed economic data raising uncertainty about the Federal Reserve’s future monetary policy.

“Given Tuesday’s supply, which includes $297 billion in coupons and bills, some discomfort is expected,” said Tom Simmons, a Jefferies New York-based economist.

The yield on the 10-year U.S. benchmark rose 6.7 basis points to 4.54% from 4.473% reported late Friday. Additionally, the 30-year yield rose 7.9 basis points to 4.656%.

The two-year yield, which traditionally reacts to changes in interest rate expectations, rose 2.1 basis points to 4.9742%.

In the foreign exchange market, the dollar index regained its original position after the rise in government bond yields and showed a slight upward trend.

“The bond market reversed sharply on Tuesday and the dollar followed suit,” said Adam Button, senior currency analyst at ForexLive in Toronto, adding that a lackluster auction result and an improving consumer confidence report could support stronger economic growth. pointed out that this was implied.

The index measuring the dollar against a basket of foreign currencies including the yen and euro rose 0.04% to 104.60, while the euro was unchanged at $1.0858.

The value of the dollar against the Japanese yen rose 0.18% to $157.14.

Oil prices rose by more than $1 per barrel on expectations that the OPEC+ meeting on June 2 will continue to curb crude supply. of dollars.

U.S. crude futures rose 2.71% to $79.83 a barrel, while Brent crude rose 1.35% to $84.22 a barrel.

Gold prices also rose. Spot gold prices rose 0.33% to $2,358.58 per ounce. U.S. gold futures rose 1.17% and are currently trading at $2,359.70 per ounce.