Japan’s Nikkei Rallies with Strong Tech Performance
Asian markets showed mixed results following a rebound in Nvidia shares, which helped to prop up a weakened Wall Street. Japan’s Nikkei 225 surged 1.4% to 39,726.39, driven by robust demand for technology shares fueled by excitement surrounding Nvidia and advancements in artificial intelligence. Tokyo Electron saw a significant increase of 3.2%, while Advantest Corp. soared 6.6%. Shin-Etsu Chemical Co. also experienced a 1.3% rise.
Seoul’s Kospi Gains; Chinese Markets Retreat
The Kospi in Seoul edged up 0.2% to 2,781.15, continuing its upward trend. However, Chinese shares retreated, with Hong Kong’s Hang Seng Index slipping 0.1% to 18,052.55 and the Shanghai Composite Index declining 0.5% to 2,936.71. Australia’s S&P/ASX 200 also fell, down 0.9% to 7,765.40.
Positive Movements in Taiwan, India, and Thailand
Shares rose in Taiwan and India, and inched higher in Thailand, indicating a mixed but generally positive sentiment across various Asian markets.
Wall Street Sees Mixed Results; Nvidia’s Impact
On Tuesday, the S&P 500 rose 0.4%, nearing its all-time high set a week earlier, closing at 5,469.30. The Dow Jones Industrial Average, which excludes Nvidia, dropped 0.8% to 39,112.16, while the Nasdaq Composite jumped 1.3% to 17,717.65.
Most stocks outside Wall Street’s frenzy around artificial intelligence technology experienced declines. Nvidia climbed 6.8%, helping to offset broader market losses. Without Nvidia’s gain, the S&P 500 would have ended the day in negative territory. Nvidia’s shares rebounded after a three-day losing streak during which they lost nearly 13%, marking their worst performance since 2022.
Nvidia’s Influence on the Market
Nvidia has become one of Wall Street’s largest and most influential companies, with its chips driving demand for artificial intelligence applications. This demand has contributed significantly to recent record highs in the U.S. stock market, even as economic growth slows due to high interest rates. However, the intense interest in AI has sparked concerns about a potential bubble in the stock market and overly high expectations among investors.
SolarEdge Technologies Takes a Hit
SolarEdge Technologies dropped 20.6% after announcing that a customer owing $11.4 million filed for Chapter 7 bankruptcy. This raises concerns about the solar-power company’s ability to collect the owed amount. Additionally, smaller companies in the Russell 2000 index fell 0.4%.
Retail Sales and Consumer Confidence
Retail sales have been fluctuating recently, with companies noting that lower-income customers are struggling with rising prices. Despite this, the job market remains mostly solid. A report on Tuesday indicated that U.S. consumer confidence fell this month, but not as much as economists had anticipated.
Cruise Industry Sees Positive Outlook
Upper-income households appear to be faring better, with increased bookings for cruise trips. Carnival Corporation saw an 8.7% rise in its stock after raising its profit forecast for 2024. The company reported that bookings for the rest of the year are the highest on record in terms of price and occupancy, with next year’s bookings potentially even stronger.
Market Summary
Overall, the S&P 500 rose 21.43 points to 5,469.30. The Dow dropped 299.05 points to 39,112.16, and the Nasdaq Composite jumped 220.84 points to 17,717.65. The bond market has seen yields mostly falling since late April, easing pressure on the stock market. Investors hope that slowing inflation will lead the Federal Reserve to cut interest rates later this year.
Federal Reserve’s Balancing Act
The Federal Reserve has kept the federal funds rate at its highest level in over 20 years to control inflation. Wall Street hopes the Fed will time rate cuts perfectly to avoid either a deep recession or a resurgence in inflation.
Early Wednesday Trading
In early Wednesday trading, U.S. benchmark crude oil rose 29 cents to $81.12 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, increased by 31 cents to $85.32 per barrel. The dollar strengthened to 159.79 Japanese yen from 159.63 yen, while the euro remained nearly unchanged at $1.0715.
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