The S&P 500 and Dow Jones increased slightly despite resistance from Disney

The S&P 500 and Dow Jones increased slightly despite resistance from Disney Picture 1

At the end of the May 7 session, the Dow Jones industrial average inched up 31.99 points (+0.08%) to 38,884.26 points, the S&P 500 increased 6.96 points (+0.13%) to 5,187. 70 points, while Nasdaq Composite lost 16.69 points (-0.10%) to 16,332.56 points.

Megacap Alphabet and Meta Platforms shares rose 1.9% and 0.6%, respectively, driving the major indexes.

Despite officially announcing the new M4 chip line, Apple shares only inched up 0.4% when the company noted that the chip will be included in the iPad Pro instead of the Mac.

These advances pushed the S&P 500 to its fourth consecutive high for its best winning streak since March. As for the Dow Jones, the index is currently on its longest bull run since December /2023, increased for the fifth consecutive session.

The positive signs came despite Walt Disney falling 9.5%, its biggest percentage drop since November 2022, as profits in its online entertainment division were overshadowed by trading activity. Traditional television is down and box office is weaker.

Nvidia lost 1.7% after the Wall Street Journal reported that Apple is developing its own chips to run artificial intelligence (AI) software in data centers.

Tesla shares slid 3.8% on data showing the US automaker sold just 62,167 electric vehicles made at its China factory in April, down 18% from a year earlier.

Palantir Technologies plunged 15.1%, its sharpest one-day drop since May 2022, as the data analytics company's annual revenue forecast missed analyst estimates.

Despite the drag from Disney and Tesla, the market was generally buoyed by a weaker-than-expected labor market report last week, which raised expectations that the U.S. central bank will cut interest rates soon. .

"I think the market is in this trend until the big data comes out next week," said Garrett Melson, portfolio strategist at Natixis Investment Manager Solutions. The April CPI index is expected to be announced on May 15.

Overall, the Fed and policymakers are consistent in their messaging on interest rate cuts this year but the central bank will still be cautious in implementing them. This means that, on a day without important data announcements, markets appeared to ignore comments from Minneapolis Fed President Neel Kashkari that the Fed may need to keep interest rates steady for the rest of the year. of the year due to persistent inflation and the strength of the housing market.

According to LSEG, traders are predicting the Fed will cut interest rates by 0.46 percentage points by the end of 2024, with the first rate cut likely to come in September and another in December .

OIL PRICES DECREASE AS SIGNS OF SUPPLY TIGHTNESS easing

In energy markets, oil prices closed slightly lower on May 7 as there were signs of easing supply concerns, while market participants turned their attention to US inventory data. .

Brent oil futures fell 17 cents at $83.16/barrel and US WTI crude oil prices closed down 10 cents at $78.38/barrel.

Prices continued to decline after market sources said US crude oil and fuel inventories jumped last week, citing data from the American Petroleum Institute. Rising inventories, often a sign of weak demand, have defied analysts' expectations in recent weeks.

On the other hand, oil traders seem to be ignoring the escalating tensions in the Middle East. Instead, their focus is on uncertainties surrounding the outlook for global economic growth and the impact of slowing growth on oil demand, said Ricardo Evangelista, senior analyst at the firm. Financial brokerage ActivTrades commented.

BITCOIN PRICE RUNNING AROUND 63,000 USD

Bitcoin prices fell slightly as sentiment towards the cryptocurrency showed no signs of improving amid ongoing regulatory issues and capital outflows from investment products, especially ETFs, still continue.

The world's largest cryptocurrency has dropped 0.2% in the past 24 hours, standing around the $63,500 threshold.

Sentiment towards the cryptocurrency market was affected this week by a report suggesting that less than 10% of all stablecoin transactions were organic or from real users. The report has raised questions about how much real retail demand there is for cryptocurrencies as stablecoin operators, especially Tether, have been increasing market capital consistently.

Negative factors also appear amid continued outflows from crypto investment products, suggesting that sentiment towards this digital space remains largely negative. Bitcoin ETF outflows are continuing for the third consecutive week.

Lesley Montoya

Update 08 May 2024