The Dow Jones Industrial Average rose for the seventh consecutive trading day; The S&P 500 index hit a new closing high since April 9th.
*The Dow Jones has risen for the seventh consecutive trading day
*The increase in initial jobless claims in the United States last week was higher than expected
*San Francisco Fed Chairman Daley: It may take “more time” to bring inflation back to target
On Thursday, May 9th local time, investors waited for a clearer catalyst as the US stock market fluctuated and differentiated. The three major indexes closed higher, with the Dow Jones index rising unilaterally throughout the day and achieving gains for seven consecutive trading days. The Nasdaq and S&P 500 indexes showed a bottoming out and rebounding trend. The higher than expected number of initial jobless claims in the United States announced earlier consolidated market expectations for a marginal cooling of the US labor market. However, this week several Federal Reserve officials called for “maintaining high interest rates for a longer period of time,” and market risk sentiment remained suppressed.
As of the close of the day, the Dow Jones index rose 331.37 points, or 0.85%, to 39387.76 points; The Nasdaq Composite Index rose 43.51 points, or 0.27%, to 16346.26 points; The S&P 500 index rose 26.41 points, reaching a new closing high since April 9th, with a 0.51% increase to close at 5214.08 points.
In terms of industry sectors, the eleven major sectors of the S&P 500 index rose and fell. The real estate sector and utility sector led the gains with gains of 2.31% and 1.52% respectively, while the technology sector fell by 0.25%.
Chip stocks mostly fell, with Nvidia closing down 1.84%, AMD falling 2.79%, and UK chip design company ARM falling 2.34%. The latter’s financial report released after hours on the 8th showed that its first quarter performance exceeded expectations, with revenue increasing by 47% year-on-year and reaching a new high. However, the annual revenue guidance was slightly lower than the market’s expectations, sparking concerns about a slowdown in AI demand in the market.
Analysts say that ARM’s forward P/E valuation (64.68 times) is much higher than Nvidia’s, which makes investors have higher expectations for its financial performance. Meanwhile, ARM’s business is more reliant on the smartphone market, which has recently seen a slowdown in growth.
ARM is the largest IPO of the US stock market in 2023, with SoftBank Group of Japan holding 90% of the company’s shares. As of the close on the 9th, the company’s stock price has still accumulated a 50% increase this year.
In terms of economic data, data released by the US Department of Labor on the 9th showed that in the week ending May 4th, the number of initial jobless claims in the United States increased by 22000, seasonally adjusted to 231000, the highest level since the end of August last year, with an expected value of 215000. The increase is the largest in the past four months. More than half of the increase came from the state of New York.
Analysts say that due to the spring break in public schools in New York City from April 22nd to 30th, which allows school staff to apply for relief during the break, this may have driven a significant increase in the number of applicants in the state.
San Francisco Fed Chairman Daley stated on the 9th that high interest rates are currently suppressing the US economy, but it may take “more time” to bring inflation back to target. However, she also stated that if the US job market deteriorates, Federal Reserve decision-makers may consider lowering interest rates.
“Our policy is restrictive, but it may take more time to lower inflation,” Daley said in a discussion held at George Mason University in the United States, with signs that the cooling trend in the US labor market is continuing; Inflation expectations remain stable, and consumers become sensitive to prices.
In terms of individual stocks, American internet brokerage giant Robinhood’s first quarter earnings and revenue exceeded analyst expectations, but turned from gains to losses during the trading session, closing down 3.08%.
The financial report shows that in the first quarter, Robinhood’s earnings per share were $0.18, far exceeding the general expectation of $0.05. The net revenue was 618 million US dollars, which was also significantly higher than the expected value of 54314 million US dollars. Thanks to the increase in cryptocurrency trading volume and rising borrowing costs, net interest income was boosted, and adjusted core profit increased by 115% year-on-year to reach $247 million.
Roblox, a multiplayer online sandbox game platform, fell 22.06% after the company lowered its annual performance guidance.
In terms of commodities, the improvement of supply and demand prospects has driven up oil prices. The West Texas Intermediate Crude Oil (WTI) futures for June delivery on the New York Mercantile Exchange rose $0.27, or 0.78%, to close at $79.26 per barrel.
Analysts said that the decline in US crude oil inventory data last week was greater than expected, boosting the oil market.
On that day, the settlement price of gold futures rose 0.63% to close at $2336.8 per ounce. The decline in US Treasury yields and the US dollar index is considered the driving force behind the rise in gold prices.