Equity markets in New York may persist in setting new records following a reduction in interest rates.
The Federal Reserve has made a move to lower the key interest rate by 0.25 percentage points, a decision that has sent ripples through the stock market. This cut, which was announced recently, has particularly put technology stocks in the spotlight among companies. In the aftermath of the rate cut, Nike is anticipated to witness a steeper recovery in sales and earnings than the market currently expects. This optimistic outlook is supported by the upcoming 2026 FIFA World Cup in the USA. In fact, Nike rose 1.6 percent in pre-market trading following the announcement. The Federal Reserve, however, kept the outlook for the future interest rate path vague, leaving investors and analysts guessing about the next steps. This uncertainty didn't deter Andrew Jackson, the newly appointed Head of Japan Equity Strategy at Ortus Advisors, who stated that the stock market today is unlikely to lead to profit-taking. Jürgen Molnar, a capital market strategist from broker RoboMarkets, echoed Jackson's sentiments, summarizing that the US central bank continues to proceed cautiously. Molnar also added that the rally can continue based on the Fed's decision. Meanwhile, in the tech sector, Nvidia's shares rose 2.9 percent, while Intel's shares soared an impressive 29.1 percent. Interestingly, Nvidia is investing $5 billion (4.22 billion euros) in Intel through a stake, forming a partnership. Despite this, Intel's competitor AMD's shares fell 4.3 percent. The labor market, as per experts at Index Radar, is of particular importance for investors. The weekly initial jobless claims decreased compared to the previous week, suggesting a potential improvement in the employment scenario. However, not all news was positive. Economist Eric Winograd from AllianceBernstein warned that the markets underestimate systemic risks if the Fed were to lose its independence due to political pressure, as US President Donald Trump is reshaping the Fed board. In other corporate news, FedEx will report its first-quarter results after the market close. In June, the company provided a lower outlook for adjusted earnings per share than analysts expected due to weak demand. Furthermore, FedEx did not provide an outlook for the entire fiscal year in June due to US trade policy, among other things. In conclusion, the Federal Reserve's interest rate cut has set off a chain reaction in the stock market today, with technology stocks taking center stage. While optimism surrounding certain companies like Nike is high, concerns about the Fed's independence and the overall health of the labor market persist. As always, the stock market continues to be a dynamic and intriguing landscape for investors.
Read also:
- Minimal Essential Synthetic Intelligences Enterprise: Essential Minimum Agents
- Tesla is reportedly staying away from the solid-state battery trend, as suggested by indications from CATL and Panasonic.
- UK automaker, Jaguar Land Rover, to commit £500 million for electric vehicle manufacturing in Merseyside
- Fast-food chain Subway joins the trend of plant-based alternatives, introducing a Beyond Meat meatball sub.
