On the evening of the 13th in Peking time, the performance of the U.S. stocks was mixed on Thursday. Investors are still assessing the latest interest rate decision of the Federal Reserve and U.S. stock earnings. After the significant cooling of CPI data on Wednesday, the unexpected decrease of U.S. PPI in May further confirms that inflation pressure is easing.
As of publication, the S&P 500 index rose 0.15%, the Nasdaq composite index rose 0.6%, and the Dow Jones Industrial Average fell 0.53%.
On Wednesday, the US stock market showed mixed trends, with the S&P 500 index and the Nasdaq both hitting historic highs. The Dow ended down slightly 0.09%. The Federal Reserve announced it would keep interest rates unchanged and suggested there will be only one rate cut in 2024, after predicting three rate cuts for this year in March.
Investors optimistic that despite the central bank keeping interest rates unchanged, its 2% inflation target has made "modest further progress".
In addition, the US consumer price index (CPI) for May, released on Wednesday, showed a significant cooling down, reinforcing hopes that US inflation is indeed easing. After the CPI report was released, US Treasury yields plummeted, with the 10-Year bond falling to its lowest level since April 1.
James McCann, Deputy Chief Economist at Aberdeen, said: "As expected, the Fed kept policy unchanged, but still left the door open for rate cuts this year. The surprise downward response of CPI inflation is more encouraging. Due to the individual differences in the downward interest rate in the US this year, we see that the market still expects the Fed to cut interest rates several times this year, which is not surprising."
In terms of economic data on Thursday, the US producer price index (PPI) for May unexpectedly fell 0.2% on a month-on-month basis, the largest decline in seven months, further proving that inflationary pressures are slowing. Compared with May last year, US PPI rose 2.2%.
Economists expected US PPI to increase by 0.1% in May. The PPI index is a measure of the prices wholesalers pay for raw materials.
Before the PPI data was released on Thursday, the US Department of Labor released the Consumer Price Index (CPI) for May, which also showed that inflation was generally cooling down.
After the PPI data was released, economists generally optimistically believed that the Federal Reserve will cut interest rates twice this year, starting in September.
Federal Reserve officials have kept the benchmark interest rate at its highest level in more than 20 years since July last year. The Fed's interest rate path lattice graph released on Wednesday showed that officials predict only one rate cut this year, by 25 basis points.
Another data released on Thursday showed that for the week of June 8, the initial jobless claims in the United States were 242,000, higher than the expected 225,000 and the previous value of 229,000. For the week of June 1, there were 1.82 million continuing jobless claims, higher than the expected 1.798 million and the previous value of 1.792 million.
New York Fed President John Williams will give a speech on Thursday. Like Powell, Williams has always believed that the current policy is conducive to steadily reducing inflation to target levels.
Focus stocks
$Tesla (TSLA.US)$Rising nearly 7%, Tesla shareholders voted to approve a $56 billion compensation plan for CEO Elon Musk, allowing the electric car maker's legal headquarters to move to Texas, USA.
$Broadcom (AVGO.US)$Increasing nearly 15%, the company's second-quarter results exceeded expectations, raising its performance target and announcing a 1-for-10 stock split.
$NVIDIA (NVDA.US)$Up nearly 3%, previously rose over 3%, hitting a new high during the trading day; institutions claim that Nvidia accounts for 88% of global independent graphics card shipments in Q1 this year.
$Bilibili (BILI.US)$Up nearly 10%, it had risen more than 13% before, and its game "Three Kingdoms: The Big Conqueror" topped the game bestseller list on the first day of public beta, ranking fourth.
$MicroStrategy (MSTR.US)$Down nearly 4%, the company proposed to issue $500 million in convertible bonds to buy more Bitcoin.
Edited by Jeffrey