NEW YORK (dpa-AFX) – On Wednesday, investors in the New York stock market reacted with relief to the significantly weakened inflationary pressure in the United States. The leading index Dow Jones Industrial (Dow Jones 30 Industrial) recently rose by 1.47 percent to 33,256.72 points. The market-wide S&P 500 gained 1.93 percent to 4202.10 points. The technology-heavy and interest-sensitive NASDAQ 100 recorded an even stronger increase of 2.53 percent to 13,337.59 points.
In the US, the momentum of price increases slowed down more than expected in July. Inflation slowed to 8.5 percent. In June, inflation in the world’s largest economy was still 9.1 percent, the highest level in over 40 years.
According to analyst Jochen Stanzl from broker CMC Markets, the probability of the Fed raising key interest rates by 0.75 percentage points in September has collapsed according to the price data.
High interest rates usually paint equities in a worse light compared to fixed income investments, and equity investors are correspondingly pleased when interest rates ease. At the same time, concerns that the Fed could stall the economy with large rate hikes are being eased somewhat.
“The market response is encouraging,” commented Garrett Melson, portfolio strategist at Natixis Investment Managers. “Short-term interest rates are falling, the dollar is weakening, stocks are rising, led by the tech industry.” This is exactly what one would expect if the chances of a soft landing for the economy increased.
The scramble to take over the short message service Twitter is entering a new round. Tesla boss Elon Musk Contrary to previous promises, he is again selling shares in the US electric car manufacturer on a large scale – and referred to the dispute over the Twitter deal. “In the (hopefully unlikely) event that Twitter forces the deal to close and some equity partners exit, it’s important to avoid a fire sale of Tesla shares,” Musk tweeted. At the end of April he had written that no further share sales were planned. Tesla shares gained 3.7 percent, Twitter gained 2.9 percent.
The largest US crypto exchange Coinbase got deep into the red in view of the price slide in digital currencies such as Bitcoin and Ether. High write-downs on investments had a significant impact. Overall, the business figures for the second quarter fell short of the already dampened expectations. According to analysts, the company’s long-term prospects remain positive. Added to this was the generally good mood for tech stocks following the release of US inflation data. The titles rose last by 3.7 percent. In the pre-market business, Coinbase was still clearly in the red.
In the Dow, the shares of the bank Goldman Sachs were ahead with premiums of more than three percent. Walt Disney won a similar amount, the entertainment group publishes its quarterly figures after the market closes./ajx/he