Wall Street Relieved as Fed Holds Off on Rate Hike, Tech Stocks Rebound
Financial districts breathe a sigh of relief following Federal Reserve statements
The US Federal Reserve opted to keep interest rates steady, sending the markets soaring. On Wednesday, following the announcement, the Dow Jones climbed 0.9% to 41,964 points while the S&P 500 surged about 1% to 5,675 points. The Nasdaq, a tech-focused index, rose by 1.4% to 17,750.
With the Fed's decision to hold steady, investors found a silver lining. If President Trump's contentious trade policies intensify, the risks of stagflation could escalate, dousing the flame of economic growth. The uncertainty created by these policies might dim the spark of consumption and investment, while the imposition of potential tariffs could fuel inflation, creating a tricky dilemma for monetary policy choices.
Bonds and Gold, Safer Havens
In the face of market turmoil, investors sought refuge in US Treasury bonds. The yield on the 10-year US bonds dipped from 4.323% to 4.285%, as prices soared. Gold, a traditional safe-haven asset, also gained 0.4%, lifting its value to around $3,045 per troy ounce post a slight dip earlier. The US dollar, however, eased up slightly, strengthening 0.3% to 103.52 points.
Thomas Altmann, a portfolio manager at asset manager QC Partners, cautioned investors to tread carefully. The Fed's outlook on the economy is clouded with uncertainty, reflecting the discordant opinions among its members. Moreover, inflation expectations are on the rise, and the range of forecasts is widening. "This reveals how precarious the Fed considers the current volatile trade policy of the new US administration," Altmann said.
Trump's Media Ambitions Blossom, Truth+ Streaming Ahead
The media spotlight was on Trump Media and Technology Group (TMTG), with its shares climbing by 2.5%. This media conglomerate, known for the social media platform Truth Social, plans to launch a streaming app called Truth+ on US streaming provider Roku. In response to the news, Roku's stock leaped around 7%.
Demand was also recorded for Spire Global, a data provider. Spire, relying on Artificial Intelligence (AI) and Nvidia's graphics processors, launched two weather models based on AI. In reaction, Spire's shares soared by 5.5%, while Nvidia advanced by nearly two percent.
On a less favorable note, the pharmaceutical giant, Gilead Sciences, fell 2.5% in value. The US Department of Health announced an investigation into the HIV prevention department of the US Centers for Disease Control and Prevention (CDC) for possible overlaps with other agencies. The inquiry follows media reports suggesting a potential dissolution of the department. Last year, Gilead generated $19.6 billion with its HIV medications, making up approximately 68% of its total revenue. General Mills, a US food conglomerate, also lost ground after a downgrade in forecast pushed its shares down by around 2%.
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Keywords:
- Stock prices
- Stock trading
- Dow Jones
- Wall Street
- Federal Reserve
- Interest rates
- Tech stocks
- Trade policy
- Inflation
- Safe-haven assets
- Streaming services
- Data providers
- Pharmaceuticals
- Food companies
- The Fed's decision to hold off on a rate hike sparked a rally in tech stocks on Wall Street, with the Nasdaq climbing 1.4% to 17,750 points.
- Amidst market uncertainty, investors turned to US Treasury bonds for relief, as the yield on the 10-year US bonds dipped, boosting their value.
- In a move to diversify its offerings, the media conglomerate Trump Media and Technology Group (TMTG) saw its shares rise by 2.5%, alongside a 7% surge in Roku's stock, as it announced plans to launch a streaming app called Truth+ on Roku.
