Tech Stocks May Lead Initial Upward Move On Wall Street
10 Julho 2024 - 10:11AM
IH Market News
The major U.S. index futures are currently pointing to a higher
open on Wednesday, with stocks likely to see initial strength after
ending yesterday’s choppy trading session little changed.
Technology stocks may lead an early upward move after Taiwan
Semiconductor (NYSE:TSM) reported its second quarter sales surged
much more than expected.
Shares of Taiwan Semiconductor, which supplies chips for AI
giants like Nvidia (NASDAQ:NVDA) and Apple (NASDAQ:AAPL), are
jumping by 2.6 percent in pre-market trading.
Overall trading activity may be somewhat subdued, however, as
traders look ahead to the release of closely watched consumer price
inflation data on Thursday.
Economists expect the annual rate of consumer price growth to
slow to 3.1 percent in June from 3.3 percent in May, while the
annual rate of core consumer price growth is expected to hold at
3.4 percent.
Stocks showed a lack of direction over the course of the trading
session on Tuesday, with the major averages bouncing back and forth
across the unchanged line before eventually ending the day narrowly
mixed.
Despite the choppy trading, the Nasdaq and the S&P 500 once
again reached new record closing highs. While the Dow edged down
52.82 points or 0.1 percent to 39,291.97, the Nasdaq inched up
25.55 points or 0.1 percent to 18,429.29 and the S&P 500 crept
up 4.13 points or 0.1 percent to 5,576.98.
The lackluster performance on Wall Street came as traders
digested Federal Reserve Chair Jerome Powell’s testimony before the
Senate Banking Committee.
Powell told the committee more good data would strengthen the
central bank’s confidence inflation is moving sustainably toward
its 2 percent target and lead to a potential interest rate cut.
“The Committee has stated that we do not expect it will be
appropriate to reduce the target range for the federal funds rate
until we have gained greater confidence that inflation is moving
sustainably toward 2 percent,” Powell said in prepared remarks.
“Incoming data for the first quarter of this year did not
support such greater confidence,” he continued. “The most recent
inflation readings, however, have shown some modest further
progress, and more good data would strengthen our confidence that
inflation is moving sustainably toward 2 percent.”
Powell’s remarks come as a report released by the Commerce
Department late last month showed the annual rate of growth by core
consumer prices, which exclude food and energy prices, slowed to
2.6 percent in May from 2.8 percent in April.
The Fed Chair also warned of the risk that leaving interest
rates at an elevated level for too long could jeopardize economic
growth.
“In light of the progress made both in lowering inflation and in
cooling the labor market over the past two years, elevated
inflation is not the only risk we face,” Powell said. “Reducing
policy restraint too late or too little could unduly weaken
economic activity and employment.”
Most of the major sectors ended the day showing only modest
moves, contributing to the lackluster close by the broader
markets.
Banking stocks showed a significant move to the upside, however,
with the KBW Bank Index climbing by 1.5 percent.
Notable strength was also visible among brokerage stocks, as
reflected by the 1.1 percent gain posted by the NYSE Arca
Broker/Dealer Index.
On the other hand, software stocks saw considerable weakness on
the day, dragging the Dow Jones U.S. Software Index down by 1.6
percent.
Energy stocks also moved to the downside, as the price of crude
oil moved lower for the third consecutive session.
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