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Wall Street Posts Gains following EU Trade Dispute Delay and Strong Consumer Confidence
The major US stock indices recorded gains at the onset of this week, buoyed by the postponement of tariffs on EU imports and an upward swing in consumer confidence in the United States. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite indices all experienced growth.
Following the holiday break, US stock exchanges saw positive signals emerging from Europe, where exchanges had previously celebrated the easing of the trade dispute between the US and the EU. US President Donald Trump opted to push off additional tariffs on EU imports until July 9 in order to provide more room for trade agreement negotiations. Investors now view the proposed tariffs more as a negotiating tactic than a firm trade policy decision, which has minimized their impact on the financial market and created favorable conditions for equities to climb in value.
According to preliminary figures, the Dow Jones Index advanced by 1.8 percent to 42,344 points, while the S&P-500 and Nasdaq Composite rose by 2.0 and 2.5 percent, respectively. In all, 2,411 gainers and 380 losers were recorded on the New York Stock Exchange, with 35 titles remaining unchanged. Even surpassing expectations, US consumer sentiment in May demonstrated significant improvement. "Consumer confidence improved in May after five consecutive months of decline," commented economist Stephanie Guichard of The Conference Board. Data also showed that the pace of decrease in durable goods orders, while significant in April, had been better than anticipated.
The dollar annexed gains from its recent losses, with the Dollar Index increasing by 0.4 percent. The easing of recession concerns and reduced expectations for interest rate cuts supported the currency. On the bond market, two-year Treasury notes and short-term bonds took center stage, with market strategist Ahmad Assiri of Pepperstone stating, "Today's Treasury auctions are the ultimate test of demand." Solid demand for two-year bonds alleviated concerns, and subsequently boosted demand on the secondary market, resulting in initial further yield decreases. The yield on ten-year US Treasury bonds dropped by 7 basis points to 4.44 percent, as expectations of interest rate cuts waned and hopes of a resolution to the trade dispute strengthened, both bolstering not only the dollar but also US bonds.
The rising dollar, waning interest rate cut expectations, and increased interest in US assets put considerable pressure on the gold price, causing it to decrease by 1.1 percent. Oil prices also fell by 1.0 percent, with the OPEC+ cartel exploring the possibility of production increases at its upcoming meeting. According to market analyst Milad Azar of XTB MENA, expectations indicate an increase of 411,000 barrels per day in July.
Technology stocks displayed widespread demand, with Nvidia benefiting from plans from a prominent tech firm to release cheaper AI chips specifically targeted for the Chinese market starting in June. The stock climbed by 3.2 percent. On Wednesday after market close, technology giant Apple is due to release its closely watched earnings report. Another tech stock, Apple (+2.5%), demonstrated remarkable resilience, recovering the majority of last Friday's losses after US President Trump announced threats of imposing 25 percent tariffs on iPhones made in India. Trump called for iPhones produced elsewhere to be restricted, prompting the tech firm to retaliate with plans to increase tariffs on various US goods.
The deadline for a potential takeover of the British semiconductor manufacturer Alphawave IP Group by Qualcomm has been extended for a third time, with a new deadline set for Monday. Financial details, however, have not been disclosed. Qualcomm shares rose by 2.2 percent.
The Tesla stock surged by 6.7 percent after Elon Musk indicated that he was realigning his focus toward heading his companies, stating, "I am super focused on leading my companies." Despite a sharp decline in European sales for the electric vehicle manufacturer in April, this development did not hinder the stock's growth.
Salesforce (+1.5%) stands on the brink of a multibillion-dollar acquisition, with the US enterprise software provider intending to acquire Informatica, a specialist in data management software. Eli Lilly (+1.6%) is also in the market for acquisitions, planning to buy SiteOne Therapeutics, a pain treatment company, for amounts totaling up to $1 billion. PDD Holdings dropped by 13.6 percent, with its parent company, the Chinese online retailer Temu, reporting a substantial decrease in profits due to weakening demand in China.
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Source: ntv.de, mau/DJ
Keywords:- Wall Street- Trade Dispute- Tariffs- Consumer Sentiment
The positive economic climate on Wall Street was further bolstered by the deferment of tariffs on EU goods and a surge in consumer confidence, creating favorable conditions for various employment-focused policies, such as community and business policies, as investments in technology continued to rise. The proposed tariffs, now viewed more as a negotiating tactic, demonstrated a minimal impact on the financial market and led to equities climbing in value.
As US stock exchanges experienced growth, technology stocks exhibited widespread demand, with organizations such as Nvidia demonstrating recovery and expanding into new markets, like the Chinese AI chip market. Additionally, tech Giants like Apple, despite external pressures, maintained their resilience and continued to perform well.
