(New York) The New York Stock Exchange, which had started the day dismal, regained momentum on Thursday, led by the NASDAQ, after a week of breathing.
The Dow Jones Index advanced 0.50% to 33,833.61 points and the tech-tinged NASDAQ climbed 1.02% to 13,238.52 points.
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“There is a healthy rotation” of investor placements “towards other industry sectors and this reflects the feeling that the Fed is almost done with raising rates,” Art Hogan of B. Riley Wealth Management told AFP. .
“You can see that the stock market upside rally is broadening,” he added.
Same story at LBBW, where Karl Haeling points out that small caps are part of the march forward, “having had a very good week”.
The Russell 2000, which includes small caps, stabilized on Thursday (-0.41%), but gained 4.44% since the start of the week.
“The bull market is broadening its base,” commented the LBBW bank analyst. “And of course there’s also this enthusiasm around artificial intelligence.”
Amazon took 2.49% after an analyst note indicating that Amazon web and cloud services (AWS) will soon catch up with Microsoft or Alphabet in offering services with artificial intelligence.
Tesla soared almost 5% and was still up almost 3% after the close after General Motors announced – after Ford two weeks ago – that it would use Tesla’s network of electric vehicle charging stations. You’re here.
With a U.S. Federal Reserve (Fed) meeting due next week, with a break in rates in the cards, “the market perceives that the rate hike cycle is coming to an end,” adds Haeling. .
“Even though there will still be a few more, in nine to 12 months the Fed will be lowering rates, they predict that themselves and that may be what the market is aiming for,” he said. concluded.
On the stock side, the Adobe software group soared almost 5% after announcing that it was offering access to its artificial intelligence tool Firefly, image creator, to its biggest customers.
Online car seller Carvana, which has had a difficult month, went into overdrive (56.02%), surprising analysts with more optimistic projections for its second quarter results.
Regional banks continued to be supported like First Republic (1.98%) and Zions (1.64%).
Amusement park operator Six Flags Entertainment was suffering from the cloud of smoke that descended across the east of the country from the multiple fires in Canada. Worries that Six Flags parks will be deserted over the weekend or more frequently over the summer weighed on the stock (-3.09%).
On the bond market, rates eased slightly. The yield on 10-year Treasury bills was 3.71% versus 3.79%.
The Toronto Stock Exchange’s flagship index ended Thursday’s session lower on broad-based weakness, while major U.S. stock indexes advanced, buoyed by the tech sector.
“It’s definitely a calmer market today,” observed Greg Taylor, Chief Investment Officer at Purpose Investments.
The Bank of Canada raised its key interest rate to 4.75% on Wednesday after several months of holding steady, as part of the central bank’s latest move to fight inflation.
“I think a lot of people are digesting the moves we had yesterday,” Taylor said.
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U.S. markets are pricing in U.S. inflation data, which will be released next week, followed by the Federal Reserve rate announcement, Taylor said.
At this point, markets appear to be expecting a pause from the Fed next week, Taylor said. But the real question is whether this will be a long break or just a brief respite before further upside.
The publication of inflation figures, before the bank’s decision, could change everything.
“I think (it) causes a lot of uncertainty. And in general, markets don’t like uncertainty,” he said.
“It’s again like the market is trapped in this area. »
The bond market is still eyeing rate cuts toward the end of the year, Mr. Taylor continued, which he says is “too dynamic.”
U.S. markets saw some reversal on Thursday as tech recouped its losses, Taylor said, likely in part due to some weaker jobs data. US claims for employment insurance benefits increased last week, to their highest level since October 2021, even though the labor market is still healthy.
However, the tech sector’s recovery appears to be slowing overall, which could be positive for other sectors.
“For markets to be healthy, you need a broad-based recovery,” he said.
In the currency market, the Canadian dollar traded at an average rate of 74.86 cents US, up from 74.76 cents US on Wednesday.
On the New York Commodities Exchange, crude oil returned $1.24 to $71.29 a barrel, while natural gas rose 2 cents to $2.35 a million. of BTUs.
The price of gold jumped US$20.20 to US$1978.60 per ounce and that of copper rose US4 cents to US$3.80 per pound.