The First Slice for Friday, May 24, 2024
Stocks experienced a significant downturn on Thursday, with the Dow Jones Industrial Average suffering its worst day of 2024. The Dow plummeted over 600 points, marking a 1.53% decrease, while Boeing took the brunt of the hit with a staggering 7.5% drop. The broader market also felt the impact, with the S&P 500 and the Nasdaq Composite slipping 0.74% and 0.39%, respectively, despite reaching record highs earlier in the day.
Amidst this downward trend, chipmaker Nvidia emerged as a notable exception, surging by 9.3% and surpassing the $1,000 mark per share. This surge followed Nvidia’s announcement of stronger-than-expected fiscal first-quarter results and a 10-for-1 stock split. The company’s optimistic fiscal second-quarter revenue guidance further bolstered investor confidence, reflecting a robust outlook for Nvidia and its position in the market.
Nvidia’s performance holds broader significance for Wall Street, serving as a barometer for the ongoing excitement surrounding artificial intelligence (AI). With a market capitalization exceeding $2.5 trillion, Nvidia’s influence extends beyond its stock performance, exerting considerable sway over the S&P 500 index. However, despite Nvidia’s positive momentum, the broader market exhibited weakness, with most S&P 500 stocks trending downwards.
The market’s downturn was compounded by stronger-than-expected economic data, which diminished hopes for a Federal Reserve rate cut in September. Positive indicators in the services and manufacturing sectors, as well as robust labor market data, raised concerns among investors that the Fed may delay or forego interest rate cuts. Consequently, traders revised their expectations, with the likelihood of a rate cut in September decreasing to just 51%.
Analysts remain cautious as the market navigates these uncertainties, noting a lack of confidence in sustaining a new upward trend. The mix of leadership dynamics, breakdowns in specific sectors, and mediocre breadth readings contribute to uncertainty and caution among investors……….
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