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Index Update

Wednesday's market wrap was marked by modest losses. The S&P 500 and Nasdaq each fell 0.5%, while the Dow dropped over 100 points. This came after the Federal Reserve announced its decision to keep interest rates unchanged, which was largely in line with expectations. The Fed noted that economic growth remained steady and the labor market was stable at strong levels. However, its statement lacked a previous passage that pointed to progress on lowering inflation. This omission may have contributed to the market's muted reaction.

Market Movers

Earnings reports were also in focus on Wednesday. Nvidia remained in the spotlight, plunging 6% amid concerns over efficient AI models from China. This extended the company's volatile momentum in recent times. Meanwhile, Microsoft, Meta, and Tesla slipped between 2% and 0.2% ahead of their earnings reports after the closing bell. On a more positive note, shares of T-Mobile US surged over 6% after the company reported stronger-than-expected earnings. This was a bright spot in an otherwise subdued market.

Commodities Update

Gold prices surged to a three-month high, breaking $2,770/oz, as investors positioned themselves ahead of key US data and reassessed the Fed's policy outlook. Meanwhile, silver held steady near seven-week highs at $30.8/oz, driven by strong industrial demand and forecasts of a significant market deficit for the fifth consecutive year in 2025.

Macro Update

US economy grows at 2.6% annual rate in Q4 2024, slowest in 3 quarters. Despite slowdown, full-year expansion reaches 2.8%! Consumer spending & intellectual property investments boost growth, but trade & equipment investments decline. The European Central Bank (ECB) is expected to cut interest rates by 25 basis points at its January 2025 meeting, marking the fifth reduction since June 2024, bringing the key deposit rate to 2.75%, its lowest level since early 2023, amid weak Eurozone growth and tariff threats.

Futures Update

US stock futures rose on Thursday as investors digested mixed earnings reports from megacap tech companies, with Tesla and Meta Platforms surging 4% and 2% respectively, while Microsoft dropped 5% after a slight miss in its Azure cloud services forecast, as all eyes now turn to Apple's earnings for further insights into the tech sector's performance.

US stocks closed lower on Wednesday, following a modest rebound the previous day. The major indexes declined, but managed to recover some losses in the final trading hours. The Nasdaq lost 101 points (0.5%), the S&P 500 fell 28 points (0.5%), and the Dow dropped 137 points (0.3%). Despite the decline, technical analysis suggests that the S&P 500 may be poised for further gains, as it continues to trade within a rising trend channel. The Relative Strength Index (RSI) is also positive, indicating a bullish bias. Market analysts are watching key price levels, with $6,110 as a potential resistance point and $5,955 as support.

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