US stock market shows signs of recovery – technology sector as driver

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Midweek, the U.S. stock market showcased a noticeably stronger side, having struggled with losses in the preceding days. Although the monetary policy pivot expected by many market participants from the Federal Reserve has yet to materialize, Fed Chairman Jerome Powell indicated during his testimony to the House Financial Services Committee that a relaxation of monetary policy could be considered later in the year. This statement led to a marked increase in optimism among investors, who had adopted cautious positions the previous day. A sense of new beginnings was palpable in the technology sector, led by Crowdstrike, whose quarterly results were well above expectations. The Nasdaq 100, rich in tech stocks, was last noted up 0.77 percent at 18,036.36 points—a significant recovery following Tuesday’s noticeable decline of 1.8 percent. The Dow Jones Industrial Average also saw gains, standing up 0.20 percent at 38,663.16 points about two hours before the trading session closed. The broader S&P 500 Index climbed by 0.55 percent to 5,106.33 points, after investors had feared Jerome Powell might dampen the recent uptrend. The release of data from the employment services provider ADP did not provide clear direction for the markets. Instead, political developments drew attention, such as the withdrawal of Nikki Haley, sparking speculation about another presidential bid by Donald Trump. As Roland Metzenmacher of BayernLB pointed out, the former president once again proved his strong position within the Republican Party. Investors were pleased with the business report from Crowdstrike, which Markus Leistner of DZ Bank described as outstanding. The impressive quarterly figures and a strong outlook emphasized the company’s market-leading position in cybersecurity. The stock quickly surpassed its previous high before securing a gain of still a solid eleven percent. In the chip segment, Intel led a notable recovery at the top of the Dow Jones, up by 3.8 percent, while Nvidia continued its sustained record rally. With a 3.5 percent increase, the share price gradually approached the coveted 1000-dollar mark, inching closer to Apple, the leader among tech stocks. The day was less pleasant for some players in the retail sector. Foot Locker had to absorb a steep price plunge of almost one-third, driven by disappointing business figures for the crucial holiday quarter and an unconvincing outlook. A similar scenario unfolded for Nordstrom, which suffered a 15 percent share price loss, not helped by a subdued sales forecast. However, investors in Palantir had reason to celebrate, as a major order from the U.S. Army sent the share price soaring by nearly twelve percent. Sheila Kahyaoglu of Jefferies emphasized competencies in Artificial Intelligence as the decisive factor for success over competitor RTX. Yet, Tesla showed no signs of stabilization. Concerns over business in China had already affected the share price, and on Wednesday, the stock briefly fell by nearly four percent, reaching its lowest level since May 2023 at just below 175 dollars. However, it recovered somewhat, and the loss ultimately reduced to 1.7 percent.

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