Wall Street Takes a Breather: Nasdaq Slips, Tech Sector Profits Plummet
Tech sector profits trigger halt in Nasdaq's upward trajectory
Investors on Wall Street are showing hesitance, causing a slight drop in the Nasdaq after recent rallies. The Dow Jones and S&P 500, on the other hand, are inching upwards. Notably, Foot Locker shares soared almost 90% due to a megadeal with rival Dick's Sporting Goods.
On Thursday, U.S. markets closed with mixed results. The Dow Jones industrial average jumped by 0.7% to hit 42,323, while the S&P 500 added a modest 0.4% to reach 5,917. However, the tech-heavy Nasdaq slipped 0.2% to 19,112 as tech sector profits took a hit from profit-taking.
The dwindling optimism on financial markets, following the easing of trade tensions with China, was a concern for traders. They emphasized that while the trade conflict with China may have de-escalated, it's far from over. As tariffs continue to take their toll, the effects are yet to be reflected in economic data, said Ellen Zentner, chief U.S. economist at Morgan Stanley Wealth Management.
Walmart Warns of Higher Prices Ahead - Shares Slump
Despite a stronger-than-anticipated retail sector in April, sales increased by 0.1% from the previous month, U.S. retail giant Walmart delivered better-than-expected results for the quarter yet warned of potential price hikes. Uncertainty caused by trade disputes continues to loom over the industry. Walmart's shares closed down 0.5%.
Meanwhile, the proposed merger between Foot Locker and competitor Dick's Sporting Goods sent Foot Locker's stock soaring by 85.7%. Dick's is offering either $24 in cash or 0.1168 shares of Dick's stock to Foot Locker shareholders. Despite the boost in shares, Dick's own stock plummeted 14.6%.
In tech, Cisco shares rose by 4.8%, as the U.S. networking equipment manufacturer reported continued strong demand for data centers supporting AI, justifying its optimistic annual outlook. Meta, however, saw a 2.3% slide in its shares due to concerns about the delay in the launch of the top AI "Behemoth."
UnitedHealth shared a dark week, plummeting by 10.9% and hitting a five-year low after the publication of potential fraud allegations against the company by the Wall Street Journal. The U.S. Justice Department is reportedly investigating potential Medicare fraud involving UnitedHealth, though the company remains unaware of these allegations.
Potential Iran Nuclear Deal Casts Shadow Over Oil Prices
Rumors of a nuclear deal between the U.S. and Iran sent North Sea Brent crude and U.S. WTI crude prices plummeting by more than 2%. The agreement, if materialized, could see the re-entry of Iranian oil into the market, causing a downward pressure on prices.
The possible deal is currently underlining the ongoing review of the U.S. Federal Reserve's monetary policy strategy, which was last adjusted in 2020 in response to the COVID-19 pandemic. The central bank is considering significant changes to its approach, with Jerome Powell stating that the economic landscape has transformed dramatically over the last five years.
Stay tuned for more updates on today's market news!
Source: ntv.de, ino/rts
- Dow Jones
- Stock Prices
- Investments
- Trade Conflicts
- As Wall Street continues to navigate the effects of trade conflicts and theactions of federal reserve, various community and employment policies might be revised to attract more investments, potentially influencing business decisions.
- In the ever-evolving landscape of technology, with recent slides in certain tech stocks and the anticipated delay in the launch of AI projects, the finance sector may invest in research and development to ensure a competitive edge in the industry.
