In a notable reversal of fortunes, the S&P 500 and Nasdaq Composite surged on Tuesday, snapping a three-session losing streak as Nvidia shares soared, leading a tech-sector comeback. The broad market S&P 500 rose while the Nasdaq also advanced significantly. Contrasting this rebound, the Dow Jones Industrial Average faced a decline. This market movement comes
In a notable reversal of fortunes, the S&P 500 and Nasdaq Composite surged on Tuesday, snapping a three-session losing streak as Nvidia shares soared, leading a tech-sector comeback. The broad market S&P 500 rose while the Nasdaq also advanced significantly. Contrasting this rebound, the Dow Jones Industrial Average faced a decline. This market movement comes after a large sell-off in Nvidia on Monday, which sent the chipmaking giant deep into correction territory, impacting the broader semiconductor sector. However, Nvidia's swift recovery today underscores a resilient tech optimism, amidst broader economic uncertainties.
Key Takeaways:
S&P 500 and Nasdaq Break Losing Streak: The S&P 500 rose by 0.39% to 4,528.76, snapping a three-session losing streak, while the Nasdaq Composite advanced 1.26% to 13,789.60. This recovery was largely driven by the resurgence in tech stocks, particularly Nvidia.
Dow Jones Declines: The Dow Jones Industrial Average lagged, falling 299.05 points, or 0.76%, to close at 38,611.39. This decline underscored the divergent performance among major indices, with tech stocks leading gains and industrials underperforming.
European Markets Close Lower: The pan-European Stoxx 600 index finished 0.3% lower at 456.78. The FTSE 100 index fell by 0.41% to 8,247.79, and the CAC 40 dropped by 0.68% to 7,201.12, reflecting broader economic uncertainties and sectoral divergences. Airbus shares dropped 9.4% to €125.30 after the company announced it was lowering its targets for 2024, including a reduction in aircraft deliveries and earnings forecasts.
Asian Markets Mixed: Japan’s Nikkei 225 closed 0.95% higher while the broad-based Topix rose 1.72%, its highest in three weeks. South Korea’s Kospi climbed 0.35%, while the small-cap Kosdaq closed marginally higher at 841.99, snapping a three-day losing streak. The Taiwan Weighted Index advanced 0.27% and Australia’s S&P/ASX 200 closed 1.36% higher. Mainland China’s CSI 300 index declined by 0.54%, its lowest level since February 28
Bitcoin and Solana Lead Crypto Gains: Bitcoin rose more than 2% to $61,345.22, recovering from a recent slump below $60,000. Solana surged 8% to $58.24 following a network update announcement, while other cryptocurrencies like Ether (above $4,100) and Cardano (around $2.15) also saw notable gains, reflecting renewed investor interest in digital assets.
Oil Prices Decline: US crude oil futures fell by 0.98% to $80.83 per barrel, while Brent crude dropped by 1.16% to $85.01 per barrel. This decline came as traders monitored summer fuel demand and geopolitical tensions, including those on the Israel-Lebanon border, impacting market sentiment.
Treasury Yields Steady: US Treasury yields remained relatively flat, with the 10-year Treasury yield nearly 2 basis points lower at 4.23% and the 2-year Treasury yield unchanged at 4.734%. Investors are looking ahead to fresh inflation insights slated for release on Friday.
Canada Inflation Rises in May: Consumer prices in Canada unexpectedly rose in May, with inflation accelerating to 2.9% from 2.7% in April. This data dampened hopes for a July rate cut, with markets now seeing below a 50% chance of an immediate rate reduction. Core inflation also increased for the first time in five months.
FX Today:
Gold Plunges as USD Soars Amid Fed’s Hawkish Rhetoric: The XAU/USD trades at $2,319, down 0.59%. Gold price remains downwardly biased after forming a ‘bearish-engulfing’ chart pattern on Friday. The XAU/USD next support would be $2,300. Once cleared, XAU/USD would fall to $2,277, followed by $2,222. Further losses lie underneath, with sellers eyeing the Head-and-Shoulders chart pattern objective from $2,170 to $2,160. Conversely, if Gold reclaims $2,350, that will expose additional key resistance levels such as $2,387, ahead of challenging the $2,400 figure.
Canadian Dollar Roils on Whipsaw Tuesday After Canadian CPI Inflation Turns Higher: USD/CAD tumbled to a new 14-day low of 1.3624 before snapping back to Tuesday’s opening bids near 1.3660. Despite grinding out a 1.2% decline top-to-bottom from early June’s peak at 1.3791, the CAD looks set to run out of gas against the US Dollar with USD/CAD finding a price floor near 1.3650. Daily candles continue to tread water in a consolidation pattern north of the 200-day Exponential Moving Average (EMA) at 1.3582.
USD/JPY Holds Steady with Intervention Watch: The USD/JPY is upward biased after climbing above the 159.60 figure, but downward risks persist. If USD/JPY clears the psychological 160.00 mark, the next resistance level would 160.32. Further gains are anticipated above 160.50 and at 161.00. Conversely, if USD/JPY drops below 158.75, it could pave the way for testing key support levels. The next support would be at 157.82, followed by 157.53, and then at 157.24.
Australian Dollar Faces Losses, Markets Await Key Inflation Data: Tuesday's session observed a decline in the Australian Dollar as it slipped down to the 0.6650 mark against the US Dollar, edging close to the 20-day Simple Moving Average (SMA) at 0.6640. The upcoming Australian inflation data remains in the spotlight, expected to shape future RBA moves. Low-tier data reported during the Asian sessions didn't significantly affect the Aussie's standing.
EUR/USD Under Pressure Below Key Levels: EUR/USD slipped back below the 1.0700 mark, reflecting a negative bias amid broader market dynamics. Resistance is forming near the 200-day Simple Moving Average at 1.0790, with further barriers at 1.0852 and 1.0916. If the downward trend persists, support may be tested at the recent lows of 1.0667 and 1.0650, with 1.0601 looming as a critical floor.
GBP/USD Gathers Some Steam and Approaches 1.2700: The Pound Sterling performed relatively stronger against its peers and remains upbeat amid uncertainty about when the Bank of England will start cutting interest rates. The Pound Sterling advances to around 1.2700 against the US Dollar after recovering from the crucial support of 1.2620. The GBP/USD pair gathers strength to sustain above the 20-day and 50-day Exponential Moving Averages (EMAs), which trade around 1.2700 and 1.2670, respectively.
Market Movers:
Nvidia Shares Rebound: Nvidia shares moved 6.8% higher after falling more than 6% in the previous session. The sell-off on Monday marked its biggest one-day slide since April 19, but Tuesday's rebound highlighted renewed investor confidence in the tech giant.
SolarEdge Technologies Tumbles: Shares of SolarEdge Technologies plummeted by 20.6% following the announcement of a $300 million private offering of convertible notes due 2029. Additionally, the company revealed a significant customer default on an $11.4 million payment after filing for bankruptcy, worsening investor concerns.
Pool Corp. Drops on Guidance Cut: Pool Corp. shares fell 8% after the company updated its earnings guidance for the full year. The wholesale pool supplies distributor now expects full-year earnings between $11.04 and $11.44 per share, down from its previous guidance of $13.19 to $14.19 per share, and below FactSet’s consensus estimate of $13.05.
Carnival Rises on Earnings Beat: Carnival shares jumped 8.7% after the cruise company posted second-quarter earnings and revenue that exceeded expectations. Carnival reported a profit of 11 cents per share, excluding items, on revenue of $5.78 billion, surpassing analysts' expectations of a loss of 2 cents per share on revenue of $5.68 billion.
Airbus Shares Fall: Airbus shares fell 9.4% after the company announced it was cutting its financial targets for 2024, including lower earnings and fewer aircraft deliveries. This news led to a significant drop in investor confidence and a sharp decline in stock price.
Rivian Shares Soar with Volkswagen Investment: Rivian's stock surged by 50% following news that Volkswagen would invest up to $5 billion in the electric vehicle startup, beginning with an initial $1 billion stake. This major investment highlights strong industry confidence in Rivian and underscores its potential growth in the electric vehicle market.
Penn Entertainment Stock Declines After Downgrade: Penn Entertainment's shares fell by approximately 5.6% after being downgraded from outperform to market perform. The firm cited the stock’s valuation, suggesting limited upside potential, which influenced investor reactions negatively.
The market movements show a resilient optimism in technology stocks, particularly as Nvidia's rebound illustrates the potential for rapid recovery even after significant declines. While the broader indices experienced mixed results, the overall tech sector's performance, alongside favourable movements in cryptocurrencies and a stability in treasury yields, paints a picture of cautious but persistent investor confidence. This trend is particularly notable in light of the varied global economic signals, from rising Canadian inflation to fluctuating oil prices, indicating that while challenges remain, the appetite for tech and growth-driven investments continues to shape market dynamics as we move deeper into the year.
