Wall Street: Advantage of growth. Investors worried about macroeconomic data

Luc Williams

The Dow Jones Industrial dropped 0.30 percent at the close. and amounted to 38,571.03 points. The S&P 500 gained 0.11% at the end of the day. and amounted to 5,283.40 points. The Nasdaq Composite rose 0.56%. and closed the session at 16,828.67 points. The Russell 2000 index of small-cap companies is down 0.55%. up to 2,058.87 points The VIX volatility index increases by 1.47%, to 13.11 points. Monday's decline was led by cyclical stocks whose fortunes are closely tied to economic growth, such as energy, industrial and materials companies.

“Solid earnings and the prospect of lower interest rates may sustain risk-on sentiment”

Wall Street is having a strong month, with all three major averages reporting their sixth positive month in seven. The Nasdaq rose 6.9%. in May, which is the best month since November 2023. By the end of the month, however, the rally appeared to be losing steam. All three averages closed May with over 1%. below their record levels.

“Solid earnings and the prospect of lower interest rates may sustain risk-on sentiment. However, the advanced growth in share prices, reduced volatility and increased investor positioning in risky assets reflect a very high level of market optimism, which maintains a high risk of temporary setbacks,” analysts from Generali Investments wrote in the report.

“Investor expectations are high, especially for growth and technology companies. Therefore, companies that fail to beat earnings expectations or issue weak future guidance are penalized,” said Dylan Kremer, Certuity’s chief investment officer.

“The week starts with a relatively positive attitude towards risk”

Markets are waiting for the ECB's decision, which will be published on Thursday at 2:15 p.m. Investors expect a reduction in interest rates. by 25 bp. If there are no surprises, market observers will focus primarily on the press conference of ECB President Christine Lagarde and what actions the central bank may take later in the year. On Thursday, there will be a decision on interest rates. issued by the Bank of England. The markets will also focus on Friday's US labor market report for May.

“The week starts with a relatively positive risk sentiment, which appears to be a continuation of the momentum seen on Friday, although this is somewhat surprising given the upcoming market calendar. The ECB's decision is probably the most important development to watch out for, especially after last week's inflation data, which increases the risk that there will be just one further 25bp cut this year.” – said Michael Brown, strategist at broker Pepperstone in London.

Nvidia increased by almost 5%. after announcing a new set of artificial intelligence chips, meaning it's ready to fight to maintain its edge in a highly competitive space. The chipmaker said it will update its AI chip architecture every year.

“With still tight technical data, a bit of fear and optimistic sentiment.”

“With technical data still tight, a bit of fear and bullish sentiment, we are sticking to our call for an increase in summer volatility,” Wolfe Research chief investment strategist Chris Senyek wrote on Monday.

GameStop shares rose 21%. following a weekend post on Reddit by influential stock investor Keith Gill, also known as “Roaring Kitty,” who revealed he owned $116 million worth of shares in the company. Chipmaker Advanced Micro Devices fell 2% despite unveiling its latest AI processors at an industry event. Paramount Global shares gained over 7%. after a report was published on Sunday that Skydance Media had raised its buyout offer for the company to $15 per share.

The industrial activity index in the US in May was 48.7 points. against the consensus of 49.6 points. and 49.2 points in last month. The PMI index, determining the economic situation in the American industrial sector, prepared by S&P Global, increased to 51.3 points in May. with 50 points in the previous month – given in the second calculation. The initial estimate was 50.9 points. On the oil market, WTI contracts for July are down by 3.83%. to USD 74.03 per barrel, and July Brent futures fall by 3.65%. up to USD 78.15/b.


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