5/10/2024

Dow Jones closed higher for 7th day in a row

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Key points:

  • All three major US stock market indices closed in the green.
  • The growth was driven by encouraging data on weekly jobless claims.
  • Large-cap tech stocks (Apple, Amazon, Meta Platforms) rose 0.6-1%.

The Dow Jones Industrial Average rose again, closing on a positive note. This became the seventh day in a row of the index’s rise. All three major US indices also rose, following encouraging weekly jobless claims data. These data strengthened investors’ expectations regarding a possible cut in interest rates by the US Federal Reserve.

The S&P 500 rose 26.41 points, or 0.51%, to 5,214.08. The Nasdaq Composite Index rose 43.51 points, or 0.27%, to 16,346.27. The Dow Jones Industrial Average added 331.37 points, or 0.85%, to 39,387.76.

Statistical data restores optimism about rate cuts

In 2024, US Federal Reserve policy played a key role in shaping investor sentiment. US stock markets in April were able to compensate for losses caused by concerns about a possible increase in interest rates by the Federal Reserve, as well as escalating tensions in the Middle East.

Data on producer and consumer prices, which will be published next week, will be the next important indicator for investors. However, a number of other indicators already inspire hope for a possible reduction in rates. Thus, the number of Americans applying for unemployment benefits for the first time last week unexpectedly rose to 231,000 people, taking into account seasonal adjustments, versus the predicted 215,000.

Last month’s data, showing job growth slowing in April and job openings falling to a three-year low in March, pushed investors to forecast one or two Fed rate cuts this year. Before this, traders included only one decline in their forecasts.

Arm Holdings and Nvidia shares fell

The latest data and optimism about rate cuts boosted large-cap tech stocks such as Apple and Amazon.com, which rose 0.6% and 1%, respectively. Meta Platforms shares also posted gains ranging from 0.6% to 1%.

Of the 11 major sectors in the S&P index, ten rose, with the real estate sector leading the gain, adding 2.3%.

At the same time, shares of chip designer Arm Holdings fell 2.3% after the company’s full-year revenue forecast fell short of investor expectations. Shares of Nvidia, Arm Holdings’s larger rival, which has yet to report earnings for the current season, lost 1.8%.

In contrast, Spirit Airlines shares soared 12.9% to hit an all-time high after hitting lows earlier this week.

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