Key points:

  • American markets closed trading on June 27 without significant changes.
  • Micron Technology shares fell 7.11% on disappointing revenue guidance.
  • Nvidia shares fell 1.90% after a roaring rally.

US stock indices showed restrained dynamics at the end of trading on June 27, unable to determine the direction of movement. Investors took a wait-and-see approach in anticipation of the release of inflation data, which could influence further decisions by the Federal Reserve regarding monetary policy.

The Dow Jones Industrial Average closed 0.09% higher at 39,164.33, up 36.53 points. The S&P 500 also showed slight gains, rising 0.09% to 5,483.06, up 5.16 points. At the same time, the Nasdaq Composite index managed to stand out from the general background, finishing trading with an increase of 0.30%, reaching 17,858.68 points, thus adding 53.53 points.

The tech sector showed mixed dynamics

Megacap stocks posted gains as U.S. Treasury yields fell. In particular, shares of Alphabet (+0.83%) and Meta Platforms (+1.25%) showed positive dynamics. It’s worth noting that Amazon shares rose 2.19% after its market capitalization reached $2 trillion for the first time.

At the same time, Micron Technology shares fell 7.11%. Investors were disappointed by the company’s fourth-quarter revenue forecast, which was below their expectations. Despite the boom in artificial intelligence, Micron has failed to demonstrate enough growth potential, leading to a sell-off in its shares.

Nvidia shares also fell 1.90%. This drop was a continuation of the recent rapid growth of the company’s quotes.

US economic indicators: falling orders and unemployment, but growing GDP

New orders for US capital goods fell unexpectedly in May, raising concerns about the pace of economic growth. Core orders for durable goods also fell 0.1%, missing growth forecasts. These data strengthen the view that the Fed may cut interest rates in September to support the economy.

However, weekly jobless claims were below expectations, indicating continued strength in the labor market. In addition, final data showed that the US economy grew faster in the first quarter than previously expected.

Despite some positive signals, market participants remain concerned about the sustainability of the current rally. Experts recommend that investors diversify their portfolios to reduce risks in the event of a sharp change in market conditions.

Expectations regarding the Fed’s future actions remain mixed. According to LSEG FedWatch data, most investors still predict two rate cuts this year, but the Fed itself predicts only one cut in September (59.5% probability).

At the same time, Atlanta Fed President Raphael Bostic said in an essay that inflation appears to be slowing, which could open the window for rate cuts later this year. Fed Governor Michelle Bowman, on the contrary, isn’t yet ready to support rate cuts, as inflation pressures still remain high.

Thus, US economic indicators were mixed in May, reflecting the current uncertainty in the economy. Further actions by the Fed will depend on the dynamics of key indicators, as well as on the assessment of inflation risks.