5/15/2024

Nasdaq closed at a record high

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Key points:

  • The Nasdaq index reached a record high at the close of trading, adding 122.94 points.
  • The market growth was supported by the words of Federal Reserve Chairman Jerome Powell that the regulator does not plan to raise rates.
  • Alphabet shares rose 0.7% after unveiling its improved Gemini chatbot and search engine improvements.

The Nasdaq index reached a record high at the close of trading, and the S&P 500 and Dow Jones also showed positive dynamics. The market was supported by words from Federal Reserve Chairman Jerome Powell, which reassured investors. Traders were also cautiously awaiting the release of a key consumer inflation report scheduled for Wednesday.

Powell’s comments, made against the backdrop of producer price index data, allayed some investor concerns about the pace of inflation growth.

The Dow Jones Industrial Average rose 126.60 points, or 0.32%, to 39,558.11. The S&P 500 added 25.26 points, or 0.48%, to 5,246.68. The Nasdaq Composite added 122.94 points, or 0.75%, to 16,511.18.

What did Powell say?

US Federal Reserve Chairman Jerome Powell spoke about the ambiguity of the Producer Price Index (PPI) data, noting that growth was higher than expected, but adjusted downward for the previous month.

Despite the rise in the PPI, Powell does not expect the Fed to raise interest rates at its next meeting. This statement somewhat reassured investors who had previously feared a sharper tightening of monetary policy.

However, investors are cautiously awaiting the release of CPI data on Wednesday to assess whether the rise in inflation is long-term.

Despite some uncertainty, financial markets and most economists believe the Fed’s first rate cut, previously scheduled for March, could be pushed back to September.

Overall, Powell’s comments and the PPI data had a mixed impact on the market. On the one hand, a rise in the PPI may indicate higher-than-expected inflation. On the other hand, Powell’s words about his reluctance to sharply raise rates and the optimistic forecast regarding the CPI from investors and economists support a positive mood in the market.

Alphabet shares rose following Google conference

Of the 11 major industry sectors covered by the S&P, consumer staples stocks (.SPLRCS) were the biggest losers, down 0.2%. On the other hand, technology stocks (.SPLRCT) were the biggest gainers, rising 0.9%.

It is worth noting the growth of Alphabet quotes by 0.7%. Google‘s parent company demonstrated the successful use of artificial intelligence in its business with the introduction of an advanced Gemini chatbot and improvements to its search engine.

At the same time, Alibaba’s US-listed shares fell 6%. The company reported an 86% drop in profit in the fourth quarter.

By the way, US President Joe Biden presented a package of sharp tariff increases on a number of Chinese imports, including electric cars, computer chips and medical products. Accordingly, US-listed shares of Chinese electric vehicle maker Li Auto fell more than 2%, while Tesla shares rose more than 3%.

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