Wall Street: Shares of AI favorite are falling, but the market also has other segments

Luc Williams

The Dow Jones Industrial dropped 0.12 percent at the close. and amounted to 37,753.31 points. The S&P 500 lost 0.58% at the end of the day. and amounted to 5,022.21 points. The Nasdaq Composite fell 1.15%. and closed the session at 15,683.37 points. The Russell 2000 index of small-cap companies is down 0.73%. and amounts to 1,952.81 points. The VIX volatility index falls by 1.14%, to 18.19 points. Yields on US 10-year Treasury bonds fall to 4.587%.

Among the companies losing value were Netflix, Target, Apple and Microsoft

Wednesday was the sixth of the past seven negative days for the Dow, while the S&P 500 and Nasdaq Composite posted their fourth straight losing session. The four-day losing streak marks the longest for the S&P 500 and Nasdaq since early January.

The weakness in the stock market represents a respite from the strong gains seen in the first quarter and into 2023. The Dow is down about 5% in April, while the S&P 500 and Nasdaq Composite are down more than 4% so far.

“It's a more cautious market. I'm more cautious now than I have been in the last five months,” said Larry Tentarelli, chief technical strategist at Blue Chip Daily Trend Report.

The stock came under pressure as shares of artificial intelligence leader Nvidia began to fall. As a result, large-cap technology stocks fell by more than 3%. Among the companies losing value were Netflix, Target, Apple and Microsoft.

“Investors are 'cutting off some of the high flyers.' Investors are really starting to recognize the fact that there are other parts of the market that are doing well,” said Kevin Gordon, senior investment strategist at Charles Schwab.

This overshadowed a strong start to the new earnings season. While less than 10 percent S&P 500 companies have reported financial results so far, more than 3 out of 4 have exceeded Wall Street expectations.

On Tuesday, Fed Chair Jerome Powell said during a panel discussion that it would likely take more time for central bankers to be confident that U.S. inflation was heading toward the Fed's target.

“The main obstacle for the market is the hawkish revaluation of Fed expectations”

The US Federal Reserve will publish its decision after its meeting next Wednesday at 8 p.m. Polish time. Analysts expect interest rates to remain unchanged. According to the CME FedWatch tool, money market participants value over 43%. chances that the Fed will begin its monetary policy easing cycle in July.

“The main obstacle for the market is the hawkish repricing of Fed expectations. I don't think Fed Chairman Powell will do much to alleviate these concerns, perhaps intentionally. The market has reached the point where it begins to doubt whether there will be a rate cut at all in 2024, Ross Mayfield, an investment strategy analyst at Baird, told CNBC.

“Without mentioning interest rate increases, Chairman Powell emphasized on Tuesday that recent data did not provide greater certainty on inflation,” Achilleas Georgolopoulos, investment analyst at forex broker XM, said in a note.

United Airlines grew more than 17%. after reporting a narrower-than-expected quarterly loss and beating revenue expectations. JB Hunt Transport Services fell 8%. after the company failed to meet analyst expectations for quarterly results.

Capri Holdings shares fell more than 2%. after The New York Times reported that the US Federal Trade Commission is preparing to block Tapestry's $8.5 billion takeover. Shares of Travelers Companies fell more than 7%. after the insurer's first-quarter earnings disappointed investors. Clothing retailer Urban Outfitters fell more than 2%. after Jefferies downgraded its rating on the company's stock to “underweight” from “hold.”

US crude oil inventories last week increased by 2.7 million barrels, or 0.6 percent, to 446 million barrels. Gasoline stocks fell by 1.2 million barrels, or 0.5 percent, to 227.4 million barrels during this time. Reserves of distillate fuels, including heating oil, fell by 2.8 barrels, or 2.3 percent, to 115 million barrels.

On the oil market, WTI contracts for May are down by 3.13%. to USD 82.69 per barrel, and May Brent futures fall by 3.00%. up to USD 87.33/b.


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