Stock Markets Introduce Aerial Trading Commencement as of This Week
Stock Markets Surge as Trade Tensions Ease, Economic Optimism Takes Over
Wall Street commenced the week on a positive note, with encouraging signals from Europe following the postponement of the trade dispute between the US and the EU. US President Donald Trump delayed additional tariffs on EU imports until July 9, allowing room for negotiations on a potential trade agreement. This development has led investors to view US tariff threats as more of a negotiating tactic than an immutable trade policy, thereby reducing their impact on the financial market and enabling stocks to appreciate in value.
US indices demonstrated clear gains following the holiday break. The Dow Jones Index rose by 1.8 percent to 42,344 points, and the S&P-500 and Nasdaq Composite saw gains of 2.0 percent and 2.5 percent, respectively. Preliminary figures show 2,411 gainers and 380 losers on the NYSE, with 35 stocks remaining unchanged. These figures reflect economic optimism, as US consumer confidence improved much more than expected in May, according to economist Stephanie Guichard of The Conference Board.
Economic optimism was further bolstered by the improved order intake for durable goods, although it had fallen significantly in April. The dollar recovered somewhat from recent losses, with the Dollar Index gaining 0.4 percent. Recession fears were dampened, and interest rate cut expectations waned due to the trade dispute resolution and positive economic data.
On the bond market, focus was on auctions of two-year Treasury notes and short-term bonds. However, demand for two-year bonds was solid, allaying concerns. Yields initially fell further on the secondary market, only to rebound later. The yield on ten-year US Treasury notes declined 7 basis points to 4.44 percent, driven by reduced expectations of interest rate cuts. While demand for US assets increased, the strong dollar and the waning interest in US assets exerted significant pressure on the gold price, causing it to fall by 1.1 percent.
Crude oil prices dropped by 1.0 percent, as the OPEC+ cartel is expected to discuss production increases at its weekend meeting. Potential increases amounting to 411,000 barrels per day in July are anticipated, according to market analyst Milad Azar of XTB MENA.
Tech Stocks Ride the Wave of Positive Market Sentiment
Tech stocks enjoyed strong demand, with Nvidia receiving a boost from a major tech company's plans to offer simpler and more affordable AI chips specifically for the Chinese market starting June. The stock rose by 3.2%. The tech giant is set to release its closely watched earnings after market close on Wednesday, contributing to investor enthusiasm. Apple (+2.5%) also experienced strong gains, recovering most of its Friday losses, despite US President Trump's threat of 25% tariffs on iPhones made in India.
Qualcomm was granted more time to make a firm offer for the British semiconductor manufacturer Alphawave IP Group. The deadline for submitting a bid has been extended for the third time, now to Monday, though financial details were not disclosed. Qualcomm shares rose 2.2%.
Tesla stock gained 6.7% following Elon Musk's statement that he would refocus on leading his companies, despite a sharp decline in US electric vehicle maker's sales in Europe in April. Salesforce (+1.5%) is on the verge of a billion-dollar acquisition, planning to acquire Informatica, a specialist in data management software, for approximately $8 billion. Eli Lilly (+1.6%) is also making a deal: the pharmaceutical company will acquire SiteOne Therapeutics, a company specializing in pain treatment, for up to $1 billion. PDD Holdings plunged 13.6% following theparent company of the Chinese online retailer Temu reporting a sharp drop in profits due to weakening demand in China.
- The surge in stock markets has led investors to focus on community policies within companies, with a particular interest in tech giants like Nvidia and Apple, as their stocks ride the wave of positive market sentiment.
- In the realm of business and technology, investments are being made towards improving employement policies, such as Nvidia's plans to offer simpler and more affordable AI chips, which could potentially influence the employment landscape in the Chinese market.
- Meanwhile, in the general-news sector, the positive economic outlook has influenced discussions around potential financing and investing opportunities, with Qualcomm's extension to bid for the British semiconductor manufacturer Alphawave IP Group being a notable example.
