The US stock market saw a dip today, mainly due to a fall in tech stocks. Here’s a look at what happened:
S&P 500 and Major Indices
The S&P 500 was down by 0.4% in the afternoon, even though most of the stocks in the index were actually rising. The Nasdaq composite, heavily impacted by tech stocks, dropped by 1.1%. Meanwhile, the Dow Jones Industrial Average was up by 190 points, or 0.5%.
Tech Stocks Struggle
Dell: The company’s stock plummeted by 19.2%, even though it met profit expectations for the quarter. Despite a 122% rise in 2024, high expectations and concerns about profit margins affected the stock.
Nvidia: After a huge profit report last week, Nvidia’s stock fell by 1.5% for the second day in a row. This was a major factor dragging the S&P 500 down, along with Microsoft (down 2%) and Amazon (down 2.4%).
Inflation and Treasury Yields
Stocks outside of tech were more stable after the latest inflation report matched expectations. This led to a decrease in Treasury yields, which had risen earlier in the week. The 10-year Treasury yield fell to 4.51%, and the 2-year yield dropped to 4.89%.
Consumer Spending and Income
The report also showed that consumer spending and income growth slowed down more than expected. This suggests that businesses should prepare for less consumer spending compared to last year.
Federal Reserve’s Dilemma
The Federal Reserve is trying to manage inflation without causing a recession. They have kept interest rates at the highest level in over 20 years. The challenge is to reduce inflation without harming economic growth and causing job losses.
Market Reactions and Future Outlook
Real estate stocks, which benefit from lower interest rates, saw gains. For example, Boston Properties rose by 2.8%. Gap also surged by 25.9% after reporting better-than-expected profits and revenue. However, MongoDB dropped by 25% despite good quarterly results, due to weaker future profit forecasts.
Trump’s Legal Issues Impact Stocks
Trump Media & Technology Group initially rose but then fell by 6.2% following Donald Trump’s conviction on 34 felony charges. The company runs the Truth Social platform and had warned that a conviction could negatively impact its performance.
Global Market Trends
Stock markets were mixed internationally. In Asia, Tokyo’s Nikkei 225 rose by 1.1%, while Hong Kong’s Hang Seng dropped by 0.8%. European markets also showed varied performances.
Overall, the stock market faced a tough day due to declining tech stocks, but there were gains in other sectors like real estate. Investors are closely watching inflation trends and Federal Reserve actions for future market directions.
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