Stock market in New York sets new record close following central bank's rate announcement
In a day marked by economic uncertainties and geopolitical tensions, US stock markets displayed a mixed performance. The S&P 500 experienced a minor decline, falling 0.10 percent to close at 6,600.35 points. The tech-heavy Nasdaq 100 also saw a dip, losing 0.21 percent to reach 24,223.69 points.
However, the leading index, not specified, managed to close 0.57 percent higher at 46,018.32 points. The rally in Chinese search engine operator Baidu continued, with shares rising 11.3 percent to nearly $138. This surge was driven by an ongoing AI rally in the company.
On the other hand, Nvidia shares fell 2.6 percent following instructions from China's Cyberspace Administration (CAC) for the country's largest technology companies to stop buying certain AI chips from the chipmaker. This instruction has further escalated the dispute over high-tech chips between China and the US.
Thomas Gitzel, Chief Economist of VP Bank, signaled a likely reduction in the federal funds rate. According to his predictions, the federal funds rate is expected to be reduced by 0.25 percentage points at each of the remaining two meetings, making the current rate in the range of 4.0 to 4.25 percent.
The Fed has signaled further rate cuts by the end of the year, with up to two rate cuts possible. However, Elmar Völker, analyst at Landesbank Baden-Württemberg, expressed skepticism about the likelihood of a series of further rate cuts.
The dispute over interest rates has raised concerns about the Fed's credibility in the financial markets. The Fed must contend with suspicions that it is loosening monetary policy due to persistent pressure from the White House for low interest rates.
Among individual stocks, American Express shares rose 2.7 percent to a record high. Shares of cloud software specialist Workday also performed well, rising 7.3 percent, making it the top performer in the Nasdaq 100.
Analyst firm Jefferies reaffirmed its buy recommendation and raised its price target for Baidu to $157. The chance-risk profile has improved, according to analysts at Evercore ISI.
The leading small-cap index, the Russell 2000, gained moderately after briefly approaching its record high with a gain of over 2 percent. This growth indicates a positive sentiment among smaller companies despite the overall market volatility.
Read also:
- Strategizing the Integration of Digital Menus as a Core Element in Business Operations
- Financial Actions of BlockDAG Following Inter and Borussia Agreements: Anticipating Future Steps
- International powers, including France, Germany, and the UK, advocate for the reinstatement of sanctions against Iran.
- Companies urged to combat employee resignation crisis, as per findings from the Addeco Group
