July 24, 2024

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Nasdaq takes off as investors ignore Fed, Tesla rises ahead of Elon Musk’s payout decision

Nasdaq takes off as investors ignore Fed, Tesla rises ahead of Elon Musk’s payout decision

U.S. stocks traded mixed on Thursday, with the S&P 500 remaining near its record high as investors weighed the dual impact of slowing inflation and the Federal Reserve’s rollback of interest rate cuts.

The S&P 500 (^GSPC) fell below the flat line after the index crossed 5,400 to close at a new all-time high. The Nasdaq Composite (^IXIC) rose 0.2% on the heels of setting its own record, with technology stocks leading the broader rally. But the Dow Jones Industrial Average (^DJI) headed lower, down 0.7%.

Stocks hit records on an exciting day that brought a double dose of market-moving events: lower-than-expected consumer price inflation and the Federal Reserve’s interest rate forecast.

But policymakers’ shift from three rate cuts this year to just one does not appear to faze investors, given Bank Chairman Jerome Powell’s reminder that expectations are not set in stone. Traders are still pricing in two interest rate cuts starting in September, according to the European Central Bank CME FedWatch tool.

Read more: How does the labor market affect inflation?

The Producer Price Index for May fell in what appears to be the latest sign of easing inflation. The reading fell by 0.2% on a monthly basis after rising by 0.5% in April.

Also looming is a Tesla ( TSLA ) shareholder vote on whether to approve a $56 billion pay package for its CEO Elon Musk, a measure that some major investors have opposed. Musk said overnight that compensation and the electric car maker’s move to Texas had passed “by a wide margin.” Tesla stock jumped about 4% on Thursday.

See also  Tesla investor Elon Musk has been accused of making $7.5 billion worth of insider trades

Meanwhile, a jump in Broadcom (AVGO) shares has lifted market sentiment as it looks to AI and technology to fuel the rally. The chipmaker, a major supplier to Apple (AAPL), is on track for its biggest gains since 2020 after upbeat results fueled by demand for artificial intelligence.

He lives4 updates

  • Bitcoin falls 4% to hover at $66,500 per token

    Bitcoin (BTC-USD) fell more than 4% on Thursday to hover near its June low. The cryptocurrency was trading at about $66,500 per token at 11:45 a.m. ET.

    Cryptocurrency-related stocks were also affected.

    Coinbase (COIN) is down 4% while MicroStrategy (MSTR) is down more than 6%. Cryptocurrency mining company Marathon Digital (MARA) also fell by 4%.

  • Tax cuts versus “direct investments”: Trump and Biden make dueling offers to business leaders

    Ben Warschkul from Yahoo Finance reports:

    The Trump campaign and the Biden administration are making outreach to the business world Thursday with competing events that crystallize their different promises to American businesses should they win the election.

    They both offer carrots with a different flavour.

    Donald Trump, who is scheduled to meet Thursday morning with a group of prominent CEOs in Washington, D.C., is focusing heavily on tax cuts as well as cutting government regulations.

    The promise from the Biden team is that the second term will focus, as Treasury Secretary Janet Yellen is scheduled to say in a speech Thursday to business leaders in New York, on “public interventions to create a pro-business environment and fuel private sector investment.” “

    It remains to be seen which approach will resonate with the business community at large and the public at large.

    But several CEOs have signaled a close focus on taxes next year before key provisions in Trump’s 2017 tax cuts expire at the end of 2025.

    Read more here.

  • Nvidia and Broadcom reach new highs

    Shares of Nvidia (NVDA) rose as much as 3% on Thursday to touch all-time highs during the day after peer chipmaker Broadcom (AVGO) reported upbeat quarterly results supported by demand for artificial intelligence.

    Broadcom also announced a 10-for-1 stock split, sending shares soaring to record levels on Thursday. Apple’s major supplier (AAPL) is on track for its biggest gain since 2020.

  • The S&P 500 and Nasdaq indices rise as Tesla shares rise 5%

    The Nasdaq and S&P 500 held near record levels on Thursday as investors digested the Federal Reserve’s penchant for cutting interest rates just once this year while technology stocks rose.

    The S&P 500 (^GSPC) rose 0.2% after the index crossed 5,400 points to close at a new all-time high. The Nasdaq Composite (^IXIC) rose 0.6% on the heels of setting its own record, with technology stocks leading the broader rally.

    The Dow Jones Industrial Average (^DJI) fell 0.3%

    Tesla ( TSLA ) shares opened 5% higher after Elon Musk indicated that two important shareholder votes, including one involving his $56 billion pay package, had passed by a “wide margin.”

    The Fed has hinted at just one rate cut later this year, falling short of market expectations of at least two cuts. The Federal Open Market Committee (FOMC) kept interest rates unchanged on Wednesday after its two-day meeting. This decision came in the wake of the release of the latest consumer price index, which indicated a slowdown in inflation for the month of May.