Tech Stocks May Lead Early Pullback On Wall Street
17 Julho 2024 - 10:10AM
IH Market News
The major U.S. index futures are currently pointing to a sharply
lower open on Wednesday, with stocks likely to give back ground
after trending higher over the past few sessions.
Tech stocks may lead an early pullback on Wall Street after a
report from Bloomberg said President Joe Biden’s administration is
considering tougher trade rules against companies in its chip
crackdown on China.
Bloomberg said the administration has told allies that it’s
considering using the most severe trade restrictions available if
companies continue giving China access to advanced semiconductor
technology.
Citing people familiar with recent discussions, Bloomberg said
the U.S. is mulling whether to impose a measure called the foreign
direct product rule, which lets the country impose controls on
foreign-made products that use even the tiniest amount of American
technology.
The downward momentum on Wall Street also comes after former
President Donald Trump suggested Taiwan should pay the U.S. for
defense, claiming the country took “about 100%” of America’s chip
business.
Extending the upward move seen over the two preceding sessions,
stocks moved mostly higher during trading on Tuesday. The Dow led
the charge, surging to a new record closing high.
The Dow jumped 742.76 points or 1.9 percent to 40,954.48, the
S&P 500 climbed 35.98 points or 0.6 percent to a new record
closing high of 5,667.20 and the Nasdaq rose 36.77 points or 0.2
percent to 18,509.34.
The strength on Wall Street partly reflected a positive reaction
to some of the latest earnings news, with Dow component
UnitedHealth (NYSE:UNH) moving sharply higher after reporting
second quarter earnings that exceeded analyst estimates.
Bank of America (NYSE:BAC) also moved notably higher after the
financial giant reported better than expected second quarter
earnings.
Shares of Morgan Stanley (NYSE:MS) also turned positive after
seeing initial weakness after the company reported better than
expected second quarter earnings.
Traders also reacted positively to the latest U.S. economic
news, including a Commerce Department report showing U.S. retail
sales came in unchanged in the month of June.
The Commerce Department said retail sales came in flat in June
after rising by an upwardly revised 0.3 percent in May.
Economists had expected retail sales to come in unchanged
compared to the 0.1 percent uptick originally reported for the
previous month.
Excluding a sharp drop in sales by motor vehicle and parts
dealers, retail sales climbed by 0.4 percent in June after inching
up by 0.1 percent in May. Ex-auto sales were expected to creep up
by 0.1 percent.
“Judging by the positive market reaction to the US retail sales
data, it appears that investors are focusing on the economic
strength for now, while also maintaining a strong belief that
monetary policy starts to ease after the summer,” said Dan
Coatsworth, investment analyst at AJ Bell.
The Labor Department also released a report showing import
prices in the U.S. were unexpectedly flat in the month of June.
The report said import prices were unchanged in June after
dipping by a revised 0.2 percent in May. Economists had expected
import prices to rise by 0.2 percent compared to the 0.4 percent
decrease originally reported for the previous month.
Meanwhile, the Labor Department said export prices declined by
0.5 percent in June after falling by a revised 0.7 percent in
May.
Export prices were expected to edge down by 0.1 percent compared
to the 0.6 percent decrease originally reported for the previous
month.
Housing stocks showed a substantial move to the upside on the
day, with the Philadelphia Housing Sector Index spiking by 5.3
percent to a record closing high.
Optimism about the outlook for interest rates contributed to the
strength in the sector despite a report from the National
Association of Home Builders showing an unexpected dip in
homebuilder confidence in the month of July.
Gold stocks are also saw significant strength amid a sharp
increase by the price of the precious metal, driving the NYSE Arca
Gold Bugs Index up by 3.4 percent. The index reached a more than
two-year closing high.
Considerable strength was also visible among airline stocks, as
reflected by the 3.3 percent surge by the NYSE Arca Airline Index.
Banking, biotechnology and telecom stocks also saw notable strength
on the day, moving higher along with most of the other major
sectors.
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