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Daily Market Analysis from ForexMart

Wall Street Sliding: S&P 500, Nasdaq Fall Ahead of Jobs Data

The S&P 500 and Nasdaq Composite ended Thursday with small losses ahead of a major jobs report, retreating from record highs hit the day before. The Dow, however, edged up slightly.

The S&P 500 and Nasdaq started the day higher and hit intraday records, but then retreated as tech stocks slid.

Utilities and industrials also contributed to the S&P 500's decline, with consumer discretionary and energy leading the gains.

Nvidia shares fell 1.1%, falling to third place in the world's most valuable companies, behind Apple, which regained the second spot.

Investors are eyeing a key U.S. nonfarm payrolls report on Friday. The latest weekly jobless claims report points to a softening labor market that could allow the Federal Reserve to begin cutting interest rates. The European Central Bank cut its interest rate for the first time since 2019.

The Dow Jones Industrial Average gained 78.84 points, or 0.20%, to 38,886.17. The S&P 500 lost 1.07 points, or 0.02%, to 5,352.96, while the Nasdaq Composite fell 14.78 points, or 0.09%, to 17,173.12.

Among the Dow Jones components, Salesforce Inc. was the top gainer, up 6.23 points (2.63%) to close at 242.76. Amazon.com Inc. was up 3.72 points (2.05%) to close at 185.00.

Nike Inc. was up 1.40 points (1.48%) to close at 95.72.

Intel Corporation was the top loser, down 0.36 points (1.17%) to 30.42. 3M Company shares added 0.84 points (0.85%) to close at 98.22, while Goldman Sachs Group Inc shares fell 3.58 points (0.78%) to end at 458.10.

Among the S&P 500 index's top gainers were Illumina Inc shares, which rose 7.42% to close at 114.72. PayPal Holdings Inc shares rose 5.49% to close at 67.02, while MarketAxess Holdings Inc shares increased 4.86% to end at 205.97.

NRG Energy Inc shares showed the biggest decline, losing 4.56% to close at 77.83. Hubbell Inc shares fell 4.11% to end at 365.94. Eaton Corporation PLC fell 4.02% to 313.46.

The biggest gainers on the NASDAQ Composite were Virax Biolabs Group Ltd, up 85.85% to 1.97. SilverSun Technologies Inc rose 68.61% to close at 220.00, while Fibrobiologics Inc rose 53.88% to 10.31.

Cue Health Inc was the worst performer, down 79.95% to 0.01. Plutonian Acquisition Corp fell 58.10% to close at 2.43. Actelis Networks Inc fell 47.04% to 1.97.

The rise of Nvidia and other AI-related stocks has been a key factor in supporting Wall Street's rally this year. The chipmaker has contributed significantly to the S&P 500's gain of more than 12% for the year.

Traders are pricing in a 68% chance of a rate cut in September, according to CME's FedWatch tool, and are pricing in two rate cuts this year, according to LSEG data. Forecasters polled by Reuters also expect two rate cuts.

"We're in a period of uncertainty between now and tomorrow," said Thomas Hayes, chairman of Great Hill Capital in New York. "But overall, we're seeing the beginning of a global, coordinated easing policy from central banks in the West, with the exception of Japan, which is tightening," he added.

GameStop shares jumped 47% after a popular online influencer known as "Roaring Kitty" announced on YouTube that she would be livestreaming on Friday.

Lululemon Athletica shares rose 4.8% after the company beat first-quarter earnings and revenue estimates.

U.S.-listed shares of Chinese electric vehicle maker NIO (9866.HK) fell 6.8% after reporting a quarterly net loss.

Five Below shares fell 10.6% after the discount store operator lowered its full-year net sales forecast.

Advancing stocks outnumbered declining stocks on the NYSE by a 1.05-to-1 ratio. On the Nasdaq, 1,729 stocks ended higher and 2,445 ended lower, for a 1.41-to-1 ratio in favor of decliners.

The S&P 500 posted 25 new 52-week highs and five new lows, while the Nasdaq Composite posted 57 new highs and 110 new lows. Total equity trading volume on U.S. exchanges was about 10.4 billion, below the 20-day average of 12.7 billion.

August gold futures rose 0.69%, or 16.50, to $2.00 a troy ounce. WTI crude oil futures for July delivery rose 2.01%, or 1.49, to $75.56 a barrel. Brent crude futures for August delivery rose 1.87%, or 1.47, to $79.88 a barrel.
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Investors disappointed as no U.S. rate cut expected

Wall Street stocks ended slightly lower on Friday amid turbulence after strong U.S. jobs data confirmed the resilience of the economy but also raised concerns that the Federal Reserve may keep interest rates high longer than many investors had expected.

The U.S. Labor Department said it added about 272,000 jobs in May, well above analysts' forecasts of 185,000. The unemployment rate rose to 4%.

The S&P 500 (.SPX) fell sharply after the report, while Treasury yields rose as traders revised down their expectations for a rate cut in September. The index then rebounded and briefly hit a new intraday record as investors viewed the data as confirmation of a healthy economy.

Utilities (.SPLRCU), materials (.SPLRCM) and communications (.SPLRCL) were the biggest losers. Financials (.SPSY) and technology (.SPLRCT) were the best performers.

For the week, the S&P 500 rose 1.32%, the Nasdaq gained 2.38% and the Dow Jones gained 0.29%.

"This shows that a rate cut is not coming anytime soon. Rising bond yields are putting significant pressure on risk assets, including small-caps," said Sandy Villere, a portfolio manager at Villere & Co in New Orleans.

"It's all about interest rates. They may stay higher longer than expected, and investors will have to adjust to the new environment," he added.

Markets reacted to the employment data by changing expectations for the timing of the Fed's rate cut. After the data was released, traders speculated that the Fed's rate cut from the current level of 5.25% to 5.5% may not begin until November. According to Fedwatch LSEG, the probability of the Fed cutting rates by 25 basis points in September has fallen to 56% from about 70% the day before.

The Dow Jones Industrial Average (.DJI) fell 87.18 points, or 0.22%, to 38,798.99, the S&P 500 (.SPX) lost 5.97 points, or 0.11%, to 5,346.99, and the Nasdaq Composite (.IXIC) fell 39.99 points, or 0.23%, to 17,133.13.

GameStop (GME.N) shares fell 39% in volatile trading that coincided with popular blogger Roaring Kitty's first livestream in three years. The company announced a possible stock offering and a cut in quarterly sales.

Other names popular with retail investors, such as AMC Entertainment (AMC.N) and Koss Corp (KOSS.O), also suffered significant losses, falling 15.1% and 17.4%, respectively.

Nvidia (NVDA.O) shares extended their losses from the previous session, pushing their market cap back below the $3 trillion mark.

Lyft (LYFT.O) shares rose 0.6% after the company forecast 15% growth in total bookings by 2027, announced after the close of trading on Thursday.

Declining stocks outnumbered advancing stocks on the New York Stock Exchange (NYSE) by a 2.72-to-1 ratio. On the Nasdaq, 1,177 stocks advanced and 3,064 declined, giving decliners a 2.6-to-1 ratio.

The S&P 500 posted 17 new 52-week highs and five new lows, while the Nasdaq Composite posted 34 new highs and 149 new lows. Total volume of shares traded on U.S. exchanges was about 10.75 billion, compared with an average of 12.7 billion over the past 20 trading days.

Lower expectations for quick Fed action weighed on stocks, which ended lower. The MSCI World Share Index (.MIWO00000PUS) was down 0.3% after hitting a record high of 797.48.

The yield on two-year notes, a proxy for interest rate expectations, rose nearly 17 basis points to 4.8868% after six straight days of declines. The rise in yields comes as bond prices have fallen.

Rate changes had been expected in September, especially after the European Central Bank cut its deposit rate to 3.75% from a record 4% on Thursday, in line with expectations.

The Bank of Canada on Wednesday became the first G7 bank to cut its key rate, following Sweden's Riksbank and the Swiss National Bank.

The employment report also changed the dynamics of eurozone rate expectations, with traders now forecasting a 55 basis point cut this year, up from 58 bps before the data.

The European Stoxx 600 (.STOXX), which has gained almost 10% since the start of the year, fell 0.2%.

The euro zone bond market also showed weakness, with German 10-year yields up 8 basis points to 2.618%.

In currency markets, the U.S. dollar rose 0.8% against a basket of major currencies, reversing a week of losses ahead of the employment data. The euro fell 0.8% to $1.0802 after a small gain the previous day.

Brent crude futures fell 0.6% to $79.36 a barrel. The stronger dollar weighed on spot gold, which fell 3.6% to $2,290.59 an ounce.
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S&P 500, Nasdaq hit new highs: What to expect from Fed meeting, CPI data

The S&P 500 and Nasdaq both hit new record closing highs on Monday, despite investor caution ahead of consumer price data and the Federal Reserve's policy announcement this week.

Nvidia (NVDA.O) shares provided some support to the Nasdaq and S&P 500, rising 0.7% after a 10-for-one stock split. Some investors now believe the chipmaker could be added to the Dow.

The May CPI report is due Wednesday, coinciding with the end of the Fed's two-day meeting.

The central bank is expected to leave interest rates unchanged while issuing updated economic and policy forecasts. Investors will be watching closely for any hints of a possible rate cut down the road.

"It's a big week for the market in terms of Fed commentary and statements," said Quincy Crosby, chief global strategist at LPL Financial in Charlotte, North Carolina.

"Additionally, the CPI report is due Wednesday morning. Everything related to the economy and inflation is viewed through the prism of the Fed's actions by the market," he added.

The Dow Jones Industrial Average (.DJI) rose 69.05 points, or 0.18%, to 38,868.04. The S&P 500 (.SPX) rose 13.8 points, or 0.26%, to 5,360.79, and the Nasdaq Composite (.IXIC) added 59.40 points, or 0.35%, to 17,192.53.

Traders trimmed their expectations for a September rate cut after stronger-than-expected May employment data on Friday, leaving the chance of a cut at 50%.

Apple (AAPL.O) shares fell 1.9% on the first day of its annual iPhone developer conference, with investors eagerly awaiting news on how the company will integrate artificial intelligence into its products.

Among the day's best performers were Southwest Airlines (LUV.N), which jumped 7% after activist investor Elliott Investment Management acquired a $1.9 billion stake in the company.

Diamond Offshore Drilling (DO.N) rose 10.9% after oilfield services company Noble (NE.N) announced it was buying a rival for $1.59 billion. Noble also rose 6.1%.

Advancing stocks outnumbered declining stocks 1.06-to-1 on the New York Stock Exchange, while gainers were outnumbered 1.01-to-1 on the Nasdaq.

The S&P 500 posted 19 new 52-week highs and five new lows, while the Nasdaq Composite posted 56 new highs and 177 new lows.

Trading volume on U.S. exchanges totaled 10.39 billion shares, below the 20-day average of 12.80 billion.

MSCI's global share index rose on Monday, despite investor expectations for key U.S. inflation data and an upcoming central bank meeting. The euro, however, slipped after French President Emmanuel Macron announced an early election.

U.S. Treasury yields rose as investors digested Friday's labor market data and looked ahead to consumer price data and a Federal Reserve statement this week. Eyes were also focused on the Bank of Japan's possible decisions.

Adding to the uncertainty was political instability in the euro zone's second-largest economy. Far-right gains in the European Parliament elections on Sunday prompted Macron to call a national election.

The euro hit a one-month low against the dollar, while European stocks also suffered.

"The uncertainty is coming from multiple sources. "The European elections over the weekend added volatility to the markets," said Chad Oviatt, director of investment management at Huntington National Bank.

The STOXX 600 index, which covers pan-European stocks, closed down 0.27%. France's blue-chip CAC 40 index fell 1.4%, hitting a more than three-month low.

However, the MSCI Global Equity Index (.MIWD00000PUS) turned from bearish to bullish territory by the end of the day, and Wall Street partially recouped its gains. As a result, the global index rose 0.75 points, or 0.09%, to 794.99.

Huntington National Bank's Oviatt said investors are eagerly awaiting the release of U.S. consumer price index (CPI) inflation data on Wednesday morning, ahead of the Federal Reserve's policy decision Wednesday afternoon.

Adding to the uncertainty about the impact of economic data on the Fed's interest rate policy was Friday's jobs report, which showed the U.S. economy added significantly more jobs in May than expected and annual wage growth accelerated again.

"Everyone seems to be hoping for a rate cut, but so far that hasn't been the case. "So everyone is looking to the CPI data on Wednesday morning, hoping that will give us more information and commentary from the Fed in the afternoon to clarify the situation," said Jim Barnes, director of bonds at Bryn Mawr Trust in Berwyn, Pennsylvania.

U.S. Treasury yields, which move inversely to prices, rose Monday, reflecting expectations for higher, longer-term U.S. rates.

The benchmark 10-year Treasury yield rose 4.1 basis points to 4.469%, up from 4.428% late Friday. The 30-year yield also rose, up 4.8 basis points to 4.5958%.

The 2-year yield, which typically responds to changes in interest rate expectations, rose 1.5 basis points to 4.8846% from 4.87% late Friday.

In the foreign exchange market, the euro fell to its lowest since May 9 against the U.S. dollar, down 0.37% to $1.076. Earlier, the euro hit a near two-year low against sterling.

The dollar index, which measures the greenback against a basket of currencies including the euro and the Japanese yen, rose 0.08% to 105.14. Against the Japanese yen, the dollar strengthened 0.21% to 157.03.

The Bank of Japan (BOJ) is holding a two-day monetary policy meeting this week and may offer new guidance on tapering its massive bond purchases.

In commodities, oil prices hit a one-week high on hopes for a pickup in fuel demand this summer. However, a stronger dollar and fading expectations for a U.S. rate cut capped gains.

U.S. crude rose 2.93% to $77.74 a barrel, while Brent crude rose 2.52% to $81.63 a barrel.

Gold prices pared their losses after their biggest drop in 3.5 years in the previous session, as investors awaited inflation data and a policy statement from the Federal Reserve.

Spot gold rose 0.72% to $2,309.15 an ounce.
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The main events by the morning: June 13

The United States imposed sanctions against Mosbirzhi, NCC and NSD. Starting from June 13, the dollar and the euro will stop trading on the stock exchange – transactions will take place on the over-the-counter market. The Bank of Russia will set the official exchange rate based on bank reports and over-the-counter trading.

The sanctions will not lead to a significant weakening of the ruble, limiting the fall to 10%. Bloomberg economists noted that in the event of a sharp drop in the exchange rate, the Bank of Russia and the Ministry of Finance will take measures to mitigate the shock by raising interest rates and increasing the supply of currency. It is also noted that the inflow of foreign currency to Russia through export-import channels will remain sufficient.

The exchange-traded currency market in Russia has lost dollars and euros. The sanctions have deprived Russia of the main part of the foreign exchange market. In May, more than 51% of the trading volume was accounted for transactions with the dollar and the euro. Now such transactions will move to a less liquid and transparent over-the-counter market, and you will have to focus on the official exchange rate set by the Central Bank.

The United States extended operations with the NCC until November 1. The United States has allowed energy-related transactions with the National Clearing Center (NCC) until November 1, despite sanctions against the Moscow Exchange. This decision includes transactions related to the extraction, processing, transportation and purchase of oil, petroleum products, natural gas and other energy resources.

Sanctions against the Moscow Exchange undermine confidence in the dollar. New restrictions continue to reduce the importance of the dollar as an international means of payment and reserve currency.

BRICS is developing a new monetary unit. The International Research Institute of Management Problems is working on the creation of a decentralized Unit system for settlements within the framework of the BRICS. The UNT coin will become the payment unit, which will help solve the problem of cross-border payments under sanctions.
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Tech Leads Wall Street to Records, Nasdaq, S&P 500 High

The Nasdaq and S&P 500 posted their fourth straight record closing high on Thursday, while Treasury yields fell to their lowest since early April. Investors reacted to lower-than-expected inflation data and a modest rate-cutting outlook from the Federal Reserve.

The dollar strengthened against major currencies as the Fed's hawkish stance and the prospect of trade tensions between Europe and China sent European stocks sharply lower.

The Dow Jones Industrial Average ended the day slightly lower. The Labor Department reported that producer prices fell 0.2% in May from the previous month, though they rose 2.2% year-on-year, 20 basis points above the Fed's 2% inflation target.

Separately, initial jobless claims hit a 10-month high. The data came after a weaker-than-expected consumer price index report on Wednesday and a revision to the Fed's forecasts, which now call for only one rate cut this year instead of three.

"After a solid rally, markets are taking a bit of a break from yesterday's big news, and that's a good thing," said Ryan Detrick, chief market strategist at Carson Group in Omaha, Neb. "We call it the calm after the storm — consolidating the gains we saw in the first half of June."

Despite the Fed's hawkish rhetoric, expectations are growing that the central bank will cut rates for the first time as soon as September.

According to CME's FedWatch tool, financial markets are pricing in a 60.5% chance of the Fed cutting its target rate by 25 basis points in September.

"The Fed may sound hawkish, but they are dependent on economic data," Detrick said. "With today's positive PPI data, the market is thinking the Fed could ease if inflation continues to decline."

The Dow Jones Industrial Average (.DJI) fell 65.17 points, or 0.17%, to 38,647.04. The S&P 500 (.SPX) rose 12.71 points, or 0.23%, to 5,433.74, and the Nasdaq Composite (.IXIC) added 59.12 points, or 0.34%, to 17,667.56.

The S&P 500 and Nasdaq hit record closing highs for the fourth straight session on Thursday, driven by a continued rally in tech stocks.

The number of Americans filing new jobless claims last week, while another report showed an unexpected decline in producer prices in May, bolstering hopes for an early Fed rate cut.

The Federal Reserve on Wednesday forecast only one rate cut this year, down from three quarter-percentage-point cuts in March.

The S&P 500 tech sector (.SPLRCT) jumped 1.4% and the semiconductor index (.SOX) rose 1.5%, both hitting record closing highs.

Broadcom (AVGO.O) shares soared 12.3% after raising its revenue forecast for chips used in artificial intelligence technology. The company also announced a 10-for-1 forward stock split.

Nvidia (NVDA.O) rose 3.5%, while Apple (AAPL.O) rose 0.5%.

Adobe (ADBE.O) shares rose more than 14% in after-hours trading after the software maker beat Wall Street's second-quarter revenue expectations. However, the stock was down 0.2% in the main session.

New data released Wednesday showed that the consumer price index was unchanged in May for the first time in nearly two years, raising concerns among some investors that the economy could be slowing too much.

The economically sensitive industrial sector (.SPLRCI) fell 0.6%, while the Russell 2000 small-cap index (.RUT) fell 0.9%.

Tesla (TSLA.O) shares rose 2.9% after shareholders approved Elon Musk's $56 billion pay package.

Trading volume on U.S. exchanges was 10.14 billion shares, below the 20-day average of 12.49 billion.

European shares ended wider lower, with the auto sector particularly hard hit as investors worried about Beijing's retaliatory measures to the European Union's new tariffs on electric vehicles from China.

The pan-European STOXX 600 index (.STOXX) fell 1.31%, while MSCI's global share index (.MIWD00000PUS) lost 0.27%.

Emerging market shares rose 0.64%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.67%, while Japan's Nikkei (.N225) fell 0.40%.

U.S. 10-year Treasury yields fell on weak economic data.

Benchmark 10-year notes rose 13/32, sending yields down to 4.2442% from 4.295% late Wednesday.

30-year notes rose 27/32, sending yields down to 4.4% from 4.45% late Wednesday.

The dollar index (.DXY) rose 0.53%, while the euro fell 0.64% to $1.0738.

The Japanese yen weakened 0.22% against the greenback to hit $157.09 per dollar, while sterling was last at $1.2761, down 0.27% on the day.

Oil prices edged up amid choppy trading, with supply growth and a delayed Fed rate cut offset by economic data.

The price of U.S. crude oil rose 0.15% to $78.62 per barrel, while the price of Brent rose 0.18%, stopping at $82.75 per barrel.

Gold prices fell amid a stronger dollar after the release of the PPI report, which was weaker than expected. Spot gold lost 0.8%, reaching $2,303.15 per ounce.
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The main events by the morning: June 17

The Swiss conference on Ukraine turned out to be a «failure». 160 countries were invited to the summit. However, only 101 delegations participated – 78 countries signed the final communiqué, 15 refused. Armenia, Brazil, India, Saudi Arabia, Slovakia, South Africa and the UAE refused to sign the final declaration of the conference, which reflects Russia's economic strength and influence in the international arena.

Russia is facing big problems in importing Chinese goods. In June, the delivery time by sea and train increased to 55-60 days, which is a third higher than in May. The reason is the delayed demand: the situation with payments between the Russian Federation and the People's Republic of China began to improve, which led to a sharp increase in demand for logistics services. There are not enough containers and capacities, transport hubs do not have time to process everything, prices have increased by 30-40%.

The G7 countries will monitor and block the Russian «shadow fleet». The British Foreign Secretary said that the West intends to continue to provide full support to Ukraine and tighten existing sanctions, including blocking ships from the Russian shadow fleet.

NATO is discussing putting nuclear weapons on alert. Alliance Secretary General Jens Stoltenberg said it was necessary to demonstrate a nuclear arsenal in response to the growing threats from Russia and China. According to him, NATO should send a clear signal to its opponents, demonstrating its readiness to use nuclear weapons.

China has become a leader in the electric vehicle market. In 2023, every third new car in the country was electric. China accounted for about 60% of global electric vehicle sales, and demand continues to grow strongly. In a number of countries, the share of electric vehicles in total car sales exceeds 40%, and China will remain the leading player in this segment in the coming years.
 
The main events by the morning: June 18

The 1992 agreement on the avoidance of double taxation with Russia has been suspended. This was stated by the US Treasury Department. There is no exact information yet, but the measure may affect the W8-BEN form, which reduces the tax on Russian dividends from companies from the United States from 30% to 13%. The suspension will take effect on August 16, 2024.

Sanctions on the Moscow Stock Exchange and its subsidiaries will not have a significant impact on the purchase by non-residents of blocked foreign securities of Russians, the Investment Chamber said. In fact, NSD was already under sanctions.

Foreign flowers may disappear from the Russian market. Russia plans to impose restrictions on the import of flowers from unfriendly countries due to the Rosselkhoznadzor's claims to the quality of their products.

Putin arrived in North Korea today. The Russian president ordered the signing of a Comprehensive Strategic Partnership Agreement with the DPRK.

Beer exports from the European Union to Russia are resuming. In April, the volume of beer exports to Russia amounted to 23 million euros, which is the highest since August last year.

In the context of the recovery of global coal exports, Russia is losing its share in this market. According to the calculations of the Price Index Center, Russian exporters already account for less than 14.6% of global supplies, compared to 17.1% in 2021.
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XAU/USD. Analysis and forecast. The price of gold has reached a new weekly high

Gold has updated its weekly high today, aiming to break through the resistance of the 50-day simple moving average SMA. Incoming macro data from the US point to signs of easing inflationary pressures and a slowdown in the US economy, increasing speculation that the Fed will cut interest rates twice this year. This is a key factor stimulating flows towards the unyielding yellow metal.

Plus, geopolitical tensions and renewed political uncertainty in Europe provide additional support for the precious metal as a safe-haven asset. Meanwhile, the Fed took a more hawkish stance last week, and policymakers continue to favor one rate cut in 2024. A good jump in US Treasury bond yields is also helping to increase demand for the US dollar, which may deter further price growth of the precious metal.

From a technical point of view, before opening new buy positions, bulls should still wait for a steady strengthening beyond the 50-day simple moving average SMA, which is currently around $2,345. The subsequent upward movement will mean that the recent corrective decline has exhausted itself, and the price will move beyond the $2,360 zone – into the supply zone, on the way to the $2,400 mark, with some intermediate obstacle in the $2,388 area. The momentum may extend further towards the historic high reached in May.

On the opposite side, the $2320-2325 area protects against an immediate decline before the round level of $2300. Some subsequent selling below this level and the $2,285 support will be seen as a new trigger for the bears, paving the way for a resumption of the recent pullback from the all-time high. Gold will then be ready to accelerate its decline to the $2,250 level before dropping completely to the $2,220 support and the round $2,200 level.
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From Record to Bust: How Chips and the Economy Shaped the S&P 500

The S&P 500 and Nasdaq ended lower Thursday as market leader Nvidia shares pulled back from earlier gains. Investors were poring over fresh economic data and Federal Reserve statements to see when interest rates might be cut this year.

Earlier, the S&P 500 hit 5,500 for the first time in history, in line with many brokerage firms' year-end forecasts. The Nasdaq ended a seven-day run of record closing highs.

Stocks on Wall Street retreated from early record highs despite gains in overseas benchmarks. U.S. Treasury yields rose on weak economic data and expectations of more bond issuance next week.

The dollar gained ground as U.S. yields rose, widening the gap with non-dollar rates that have been trending lower. It reached 160 yen, prompting Tokyo to intervene in late April to support its currency.

The Dow Jones Industrial Average was the only major index to hold on to gains. The S&P 500 (.SPX) and Nasdaq (.IXIC) extended a streak of intraday record highs before falling, with the Nasdaq ending a seven-session run of record highs at the close.

Disappointing housing starts and building permits data, as well as a report on jobless claims, suggest a gradual cooling in the labor market, confirming that the Fed's restrictive policies are having the intended effect.

"Weaker-than-expected economic data suggests that high and long-term interest rates are achieving the Fed's goals," said Greg Bassuk, CEO of AXS Investments in New York. "These signs of a slight slowdown in the economy will be welcomed by the Fed as they consider lowering interest rates."

That, coupled with the dovish sentiment expressed by the Bank of England, which has held off on easing ahead of the upcoming U.K. general election, and the Swiss National Bank's rate cut, has created room for the Fed to maneuver on the timing of its rate cuts.

Wall Street's rally was fueled by enthusiasm for artificial intelligence, led by chipmaker Nvidia (NVDA.O), which recently became the world's most valuable company by market capitalization. However, despite the morning gains, Nvidia shares fell about 2%.

Nvidia shares fell 3.54% after the morning gains. The chipmaker overtook Microsoft to become the world's most valuable public company on Tuesday.

Dell (DELL.N) and Super Micro Computer (SMCI.O) shares also fell 0.42% and 0.26%, respectively, after initially rallying on news that Elon Musk's AI startup had won server orders.

The number of Americans filing new jobless claims fell last week, but the latest data showed the total number of people receiving benefits reached its highest level since January, suggesting the U.S. labor market is continuing to cool.

Separately, data showed that U.S. single-family home starts fell in May, reflecting continued high mortgage rates.

The energy (.SPNY) and utilities (.SPLRCU) sectors were the biggest gainers among the 11 S&P 500 sector indexes, rising 1.86% and 0.89%, respectively, while the technology sector (.SPLRCT) led the declines.

Minneapolis Fed President Neel Kashkari said it would take a year or two for inflation to return to 2% as wage growth remains high, raising concerns that interest rates will remain elevated for a long time.

Money markets are pricing in a 58% chance of the U.S. central bank cutting rates by 25 basis points in September, according to LSEG FedWatch.

The Dow Jones Industrial Average (.DJI) rose 299.90 points, or 0.77%, to 39,134.76. The S&P 500 (.SPX) lost 13.86 points, or 0.25%, to 5,473.17 and the Nasdaq Composite (.IXIC) fell 140.64 points, or 0.79%, to 17,721.59.

Kroger (KR.N) shares fell 3.27% after the company expressed caution about near-term consumer spending while reiterating its full-year sales and profit forecasts despite beating first-quarter estimates.

Trump Media & Technology Group (DJT.O) shares fell 14.56%, weighed down by potential dilution after the U.S. Securities and Exchange Commission approved the company's application to resell certain shares and warrants, netting it about $247 million in proceeds.

European stocks were strengthened by the technology and real estate sectors, as well as gains in Swiss stocks after the central bank continued to ease monetary policy.

The STOXX 600 (.STOXX) index rose 0.93%, while the broader European FTSEurofirst 300 (.FTEU3) index rose 0.90%.

The MSCI Worldwide Equity Index (.MIWD00000PUS) hit a record high but ended the day down 0.15% at 803.89.

Emerging market stocks lost 0.06%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) ended the day down 0.16%, while Japan's Nikkei (.N225) rose 0.16%.

U.S. Treasury yields initially fell after the economic data, then began to rise again.

The market is eagerly awaiting an auction next week that will offer about $183 billion in two-, five- and seven-year U.S. Treasuries. Investors often sell Treasuries ahead of auctions to boost their yields and then buy them back at a lower price, a practice known as concessioning.

The benchmark 10-year U.S. yield has risen 3.7 basis points since late Tuesday to 4.254%. The 30-year yield has risen 3.7 basis points to 4.3908%. The yield on the two-year note, which is typically correlated with interest rate expectations, rose 2.7 basis points to 4.7308%.

The dollar index, which tracks the greenback against a basket of currencies including the yen and euro, rose 0.4% to 105.63, while the euro fell 0.34% to end the day at $1.0703.

The dollar strengthened against the Japanese yen to its highest since April 29, up 0.51% to 158.89 yen.

The British pound fell to a five-week low against the dollar, down 0.43% to last trade at $1.2662.

"When we talk about dollar strength, it feels like for the first time in a long time there's a divergence in global monetary policy... Fed spokespeople continue to talk about the need for patience and time," said Art Hogan, chief market strategist at B Riley Wealth in New York.

"The dollar is standing out in a weak competitive environment, particularly in Japan, which is making things worse," Hogan added.

U.S. crude oil prices rose 0.74% to $82.17 a barrel, while Brent crude rose 0.75% to $85.71 a barrel.

Spot gold rose 1.36% to $2,359.22 an ounce. U.S. gold futures rose 1.01% to $2,354.00 an ounce. In cryptocurrencies, Bitcoin rose 0.27% to $65,029.00, while Ethereum fell 0.47% to $3,534.8.

Declining issues outnumbered advancing issues on the NYSE by 1.03 to 1, with 248 new highs and 118 new lows.

The S&P 500 posted 31 new 52-week highs and 6 new lows. The Nasdaq Composite posted 39 new highs and 217 new lows.

Trading volume on U.S. exchanges totaled 11.98 billion shares, below the 20-day average of 13.51 billion shares.
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Hot forecast for EUR/USD on June 24, 2024

Eurozone business activity indices were expected to edge higher, while the US PMI data were forecasted to decrease slightly. But everything turned out completely different. The euro area PMI data decreased significantly. However, the US PMIs report showed a rise. So, it's not surprising that the dollar strengthened its position. Now, the market is shifting from macroeconomic news, which has been practically absent in the last week of the month, to the news background. Moreover, it's more political than economic. Traditionally, there is relatively little activity in the markets at this time. Most likely, we will see some kind of rebound, after which the market will hover slightly above the current levels.

EUR/USD ended last week below the 1.0700 level, thus reflecting bearish sentiment among traders. However, there were no crucial changes, and market volatility was quite average.

On the 4-hour chart, the RSI technical indicator is hovering in the lower range, which also indicates a bearish bias.

On the same time frame, the Alligator's MAs are still heading downwards.

Outlook
In case the euro weakens further, the price could move towards this year's low. However, if the quote closes above the 1.0700 level by the end of the day, then in this case, the 1.0700/1.0760 cycle may resume.

In terms of the complex indicator analysis, we see that in the short-term period, technical indicators are pointing to a bounce or a bullish bias. Meanwhile, in the intraday period, the indicators are reflecting a downward cycle.
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Currency
Rates
EUR / USD
1.08458
USD / JPY
152.724
GBP / USD
1.28721
USD / CHF
0.87809
USD / CAD
1.38415
EUR / JPY
165.641
AUD / USD
0.65198

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