Nvidia's Rebound Halts 3-Day Slide for Nasdaq, S&P 500
**Nasdaq and S&P 500 Index End 3-Day Losing Streak
**Nvidia Rebounds Strongly After Three Consecutive Declines, Market Value Returns Above $3 Trillion
**US June Conference Board Consumer Confidence Index Drops to 100.4
On June 25th (Tuesday), local time, the three major US stock indices closed mixed, with artificial intelligence-related stocks halting their decline and rebounding, boosting the Nasdaq index to rise by more than 1%, while the Dow Jones Industrial Average (DJIA) retreated from its highest level in nearly a month. On the other hand, investors are waiting for the upcoming release of the US PCE data later this week to assess whether the recent weakness in economic activity will continue, which would strengthen the argument for the Federal Reserve to cut interest rates for the first time in the coming months.
As of the close of the day, the Dow Jones Industrial Average fell by 299.05 points, a decrease of 0.76%, to 39,112.16 points. The Nasdaq index rose by 220.84 points, an increase of 1.26%, to 17,717.65 points. The S&P 500 index increased by 21.43 points, a gain of 0.39%, to 5,469.30 points. The Nasdaq and S&P 500 indices ended their previous three-day losing streak.
Out of the eleven major sectors of the S&P 500 index, eight declined and three rose. The communication services sector and the technology sector led the gains with increases of 1.85% and 1.79%, respectively, while the real estate sector and the materials sector led the declines with drops of 1.41% and 1.28%, respectively.
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After three consecutive declines, Nvidia rebounded strongly, closing up 6.76% at $126.09, with its market value returning to over $3 trillion. The stock fell by more than 6% on Monday, marking its largest single-day drop since April 19th, with a cumulative decline of over 13% over three days, entering a correction territory.
Analysts generally stated that the stock price decline was more related to profit-taking and end-of-quarter effects, rather than issues with the company's fundamentals or a reflection of a deteriorating outlook for technology or the market.
"Seeing technology stocks perk up was the main driver of the market on Tuesday," said Emily Roland, co-chief investment strategist at John Hancock Investment Management. "After a few days of weakness, investors looking to buy some of these stocks today are looking for a better entry point."
Jeff deGraaf, an analyst at Renaissance Macro Research, stated that historical comparisons show that the recent sell-off in the semiconductor industry is not worrisome. He indicated that summer is typically a tough period, referring to the third quarter as usually being the worst for the industry."I believe Nvidia is still in a long-term uptrend. Buying on dips remains appropriate," said de Graff.
Public speeches by Federal Reserve officials are also a market focus.
On June 25th local time, Federal Reserve Governor Bowman stated in a speech on monetary policy and bank capital reform that she sees multiple upside risks to the inflation outlook, reiterating the need to keep interest rates high for some time.
"We have not yet reached the point where it is appropriate to lower policy rates. Given the risks and uncertainties in the economic outlook, I will remain cautious when considering future changes in the policy stance," Bowman said, predicting that there will be no rate cuts in 2024, with the timing of rate cuts postponed to 2025.
Bowman mentioned several areas that could put upward pressure on prices, including a tight labor market leading to high wage increases, and additional potential risks to the inflation outlook from geopolitical developments, fiscal stimulus, and a relaxation of financial conditions.
On the same day, Federal Reserve Governor Cook said that lowering interest rates at some point in the future is appropriate. She expects inflation to gradually improve this year, with faster progress in reducing inflation by 2025.
In terms of economic data, due to mediocre business conditions, job markets, and income prospects, the US Conference Board Consumer Confidence Index declined in June.
Data released by the US Conference Board on Tuesday showed that the June US Conference Board Consumer Confidence Index (CCI) fell to 100.4, lower than the revised May data of 101.3.
The indicator measuring expectations for the next six months fell by nearly 2 points to 73, while the current situation index was higher than the revised data for May. Only 12.5% of respondents expected business conditions to improve in the next six months, the lowest proportion since 2011.
Dana Peterson, Chief Economist at the Conference Board, said: "Consumer confidence fell in June but remained within the narrow range that has been in place over the past two years, as confidence in the current labor market outweighs concerns about the future."Data from the Conference Board shows that approximately 38.1% of consumers indicated that there are ample job opportunities, a higher proportion than the 37% in May.
In the commodity market, the rise in the US dollar and US Treasury yields, coupled with investors waiting for the release of key inflation data later this week, led to a decline in gold prices. The COMEX gold futures contract for August fell by $13.6, a decrease of 0.58%, to $2,330.8 per ounce.