In a remarkable turn of events, the S&P 500 has surged past the 5,600 mark for the first time ever, driven by significant gains in semiconductor and technology stocks. This milestone highlights the strong investor confidence in Big Tech, fuelled by impressive earnings reports and optimism surrounding the future of artificial intelligence. The Nasdaq Composite
In a remarkable turn of events, the S&P 500 has surged past the 5,600 mark for the first time ever, driven by significant gains in semiconductor and technology stocks. This milestone highlights the strong investor confidence in Big Tech, fuelled by impressive earnings reports and optimism surrounding the future of artificial intelligence. The Nasdaq Composite also reached a new all-time high, marking a period of continued resilience and growth potential within the technology sector. As markets eagerly await fresh inflation data, the latest rally underscores the dynamic nature of the current economic landscape.
Key Takeaways:
S&P 500 Breaks 5,600 Barrier: The S&P 500 soared 1.02%, closing at 5,633.91, marking the first time the index has crossed the 5,600 threshold. This record close was driven by a sharp rise in semiconductor stocks and marks the 37th record close in 2024.
Nasdaq Composite Hits New High: The Nasdaq Composite advanced 1.18%, also achieving a new all-time high. This is the 27th record close for the Nasdaq in 2024, highlighting the robust performance of technology stocks.
Dow Jones Gains Over 400 Points: The Dow Jones Industrial Average climbed 429.39 points, or 1.09%, to close the session on a strong note. This rise underscores the broad-based optimism in the market.
Semiconductor Stocks Lead the Rally: Taiwan Semiconductor saw a 3.5% increase following better-than-expected revenue results. Qualcomm and Broadcom also posted gains of 0.8% and 0.7%, respectively, while Nvidia climbed 2.7%, reflecting strong investor confidence.
European Markets Rise Amid French Political Stability: The Stoxx 600 index closed 0.93% higher, with retail stocks leading the gains at 1.6%. Norwegian tech group Kongsberg topped gains with an 11% rise after reporting a 21% increase in operating revenue. France's CAC 40 index rose 0.86% as political tensions eased following the recent election results, and the FTSE 100 increased by 56 points, or 0.68%, reflecting a positive sentiment in European markets.
Asian Markets Scale New Peaks Amid Mixed Performance: Japan’s Nikkei 225 reached a fresh high of 41,831.99, while the Topix closed at a record 2,909.2, supported by inflation data meeting expectations. In contrast, China’s CSI 300 dropped 0.32% to 3,428.96 as inflation figures missed expectations, with consumer prices rising by 0.2% in June, below the expected 0.4%. South Korea’s Kospi slightly rose to 2,867.99, while the Kosdaq fell by 0.22%.
Oil Prices Increase: US crude oil futures rose nearly 1% to $82.10 per barrel, up 0.85%, as US oil inventories declined by 3.4 million barrels and gasoline stocks shrank by 2 million barrels. Brent crude also saw a rise, closing at $85.08 per barrel, up 0.5%. OPEC's positive economic growth projections further bolstered market sentiment, suggesting strong demand for oil in the near future.
Treasury Yields Steady: US Treasury yields remained largely unchanged as Federal Reserve Chair Jerome Powell cautioned against keeping interest rates elevated for too long. The 10-year Treasury yield decreased slightly by 2 basis points to 4.278%, while the 2-year Treasury note yield was steady at 4.626%.
Notable Stock Movements: HubSpot shares plunged 12% following reports that Alphabet is shelving acquisition plans. Meanwhile, Apple gained 1.5%, marking its seventh consecutive record close. Advanced Micro Devices jumped nearly 4% after announcing the acquisition of Silo AI for $665 million.
FX Today:
GBP/USD Advances Steadily: The GBP/USD pair rose to 1.2842, boosted by comments from the Bank of England's Huw Pill, who cautioned against basing policy decisions on single data points. The pair faces resistance at 1.2861, with further resistance at the year-to-date high of 1.2894 and the 1.2900 level. On the downside, support is found at 1.2800, with additional support at the confluence of two trendlines around 1.2755/70 and the 50-day moving average at 1.2690.
USD/JPY Trends Upward for Third Straight Day: USD/JPY traded at 161.77, approaching the year-to-date high of 161.95. The uptrend remains intact, with buyers eyeing the psychological resistance level of 162.00. If the pair decisively clears 162.00, the next resistance levels are 163.00 and 164.87. On the downside, support lies at 161.10, with further support at 160.73.
USD/CAD Struggles Near 1.3600: The USD/CAD pair faced resistance at the 1.3600 level, retreating to test support around 1.3550. The pair remains in a consolidation phase, with the 200-day Simple Moving Average (SMA) at 1.3477 acting as a key support level. The ongoing struggle to break through the 1.3600 mark highlights the delicate balance of forces acting on the pair.
AUD/NZD Rallies as RBNZ Signals Dovish Shift: The AUD/NZD pair rose to a fresh high since 2022, reacting to the Reserve Bank of New Zealand's dovish stance. In the short term, the pair maintains bullish momentum, although overbought conditions indicated by the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) suggest a potential correction. Support levels are now at 1.1050, 1.1000, and 1.0950, while the next challenge for buyers is to reach and maintain the 1.1100 target point.
Gold Prices Rise as Attention Turns to US CPI: Gold prices are consolidating around $2,370 per troy ounce. Despite forming a bearish Harami candlestick pattern after breaching the Head-and-Shoulders neckline, gold has resumed its ongoing uptrend. The first resistance is at $2,392, followed by the $2,400 figure. A further upside could see resistance at the year-to-date high of $2,450 and the $2,500 mark. On the downside, if gold falls below $2,350, it might decline to the $2,300 level, with the next demand zone at $2,277, followed by $2,222.
Market Movers:
Taiwan Semiconductor Rises on Strong Revenue: Taiwan Semiconductor shares surged 3.5% after reporting revenue of T$207.87 billion for June, a 32.9% increase year-over-year, despite a 9.5% decline from the previous month. The company reported T$1.27 trillion in revenue for the first half of 2024, marking a 28% increase from the same period last year.
Apple Approaches Record Close Streak: Apple shares gained 1.5%, putting the company on pace for its seventh consecutive record close, a streak not seen since March 2012. The stock is up 20% over the past month, outperforming all but Tesla among the "Magnificent Seven" stocks, and reclaiming its position as the most valuable company by market capitalisation.
Intuit Declines Amid Job Cuts: Intuit shares dropped 2.6% following the announcement that the company will cut 1,800 jobs, about 10% of its workforce. Intuit plans to rehire the same number for roles focused on engineering, product, and consumer functions as part of its increased investment in artificial intelligence.
LegalZoom Plummets on CEO Departure and Revenue Outlook: LegalZoom.com shares tumbled more than 25% after CEO Dan Wernikoff announced his departure and the company slashed its full-year revenue outlook. LegalZoom now expects revenue between $675 million and $685 million, down from the prior guidance of $700 million to $720 million.
Carvana Upgraded, Shares Jump: Carvana shares rose more than 4% after Needham upgraded the stock from hold to buy, citing potential growth in unit sales leveraging its customer experience and physical footprint. Peer used-car retailer CarMax also saw a significant increase, climbing more than 6%.
Teva Pharmaceutical Soars on Upgrade: Teva Pharmaceutical Industries shares surged 7.4% after Argus upgraded the stock to buy from hold, citing a robust pipeline. UBS also raised its price target for Teva by $2 to $24 per share.
Advanced Micro Devices Jumps on Acquisition News: AMD shares jumped nearly 4% after announcing the acquisition of Silo AI, a private AI lab in Europe, in an all-cash deal valued at approximately $665 million. The acquisition is expected to close in the second half of 2024.
10x Genomics Falls on Competitive Concerns: Shares of 10x Genomics dropped around 14% following Illumina's announcement of its acquisition of Fluent BioSciences. Analysts suggest this signals a shift in leadership at Illumina, which may affect 10x Genomics’ market position.
Mastercard and Visa Downgraded by Bank of America: Mastercard and Visa stocks fell 2.5% and 1%, respectively, after Bank of America downgraded both companies from buy to neutral. The bank cited limited upside for estimates and valuation multiples as reasons for the downgrade.
As the markets continue to break new ground, the record highs of the S&P 500 and Nasdaq underscore the robust investor confidence in technology and semiconductor stocks. This surge is boosted by strong corporate earnings and the anticipation of favourable economic data. The mixed performance in global markets, along with fluctuating oil prices and stable treasury yields, highlights the complex and dynamic nature of the current financial landscape. As investors navigate these developments, the focus remains on upcoming inflation reports and central bank policies, which will play crucial roles in shaping market sentiment and future growth trajectories.
