On Tuesday, May 21st local time, all three major US stock indexes closed higher. As of the close, the Dow Jones Industrial Average rose 0.17%, the Nasdaq rose 0.22%, and the S&P 500 index rose 0.25%.
Federal Reserve Vice Chairman Barr said that the task of fighting high inflation still needs to be completed, and the duration of "maintaining higher interest rates for a longer period of time" exceeds original expectations.
Federal Reserve Director Waller said that if data supports it, it may consider lowering interest rates by the end of this year. The idea that the Federal Reserve will only lower interest rates once in 2024 is not very reasonable.
The S&P 500 index and Nasdaq both hit historic highs
On Tuesday, May 21st local time, all three major US stock indexes closed higher. As of the close, the Dow Jones Industrial Average rose 66.22 points, or 0.17%, to 39872.99 points; The Nasdaq rose 37.75 points, or 0.22%, to 16832.62 points; The S&P 500 index rose 13.28 points, or 0.25%, to 5321.41 points.
The S&P 500 index hit a historic high for the 24th time this year, closing at 5321.41 points. The Nasdaq also closed at a historic high. Nvidia's closing price reached a new high, closing at $953.860, and its performance will be announced on Wednesday local time. Macys Inc.'s stock price rose 5.13% after exceeding profit expectations. The Chicago Board Options Exchange Volatility Index (VIX) closed at its lowest level since November 2019. The yield of the 10-year treasury bond bond fell 3 basis points to 4.41%.
Strategists point out that the Chicago Board Options Exchange's volatility index options data indicates that as the index has fallen to historic lows, there will be an increasing demand for hedging against sudden market declines.
Analysts believe that investors are watching whether Nvidia, a typical representative of artificial intelligence, can match its high stock price. Nvidia's revenue is expected to be boosted by the soaring demand for data center business around the expectations of this technology.
Goldman Sachs strategist said that stock investors are preparing for a surge in volatility, and upcoming events such as Nvidia's financial reports may exacerbate any volatility.
Currently, Wall Street traders are closely monitoring several spokespersons of the Federal Reserve. Federal Reserve Director Christopher Waller stated on Tuesday that the continued weak data for the next three to five months will prompt the Federal Reserve to consider lowering interest rates by the end of 2024.
Microsoft Holds Developer Conference, Tesla Goes Up Over 6%
In terms of sectors, the 11 major sectors of the S&P 500 index rose 7 times and fell 4 times. Among them, stocks in the utility sector led the rise, while stocks in the energy sector led the decline.
Popular technology stocks have fluctuated in price. Tesla rose more than 6%, Lilly rose more than 2%, Qualcomm and Netflix rose more than 1%, Microsoft, Apple, Nvidia, Google A, and TSMC slightly rose, Texas Instruments, Amazon, Cisco, Microelectronics, and Meta fell slightly, while Broadcom, Intel, Micron Technology, and Asma fell more than 1%.
Tesla rose 6.66%. According to sources cited by Bloomberg, Tesla CEO Elon Musk plans to cut at least 10% of employees. This plan has been in place for over a month but has not been completed yet, and layoffs may continue until at least June. Analysts believe that continuous layoffs will greatly help Tesla control costs.
Google A rose 0.53%. Google announced that it will begin testing in the United States to include search and shopping advertisements in its AI generated answers. This decision was announced a few days after Google's annual I/O conference launched the AI overview feature. Google stated in its blog post that advertisements will appear in the "Sponsorship" section of the AI overview, which will be determined based on the relevance and information of the query. Google has been seeking to extend its dominant position in traditional search advertising to emerging generative AI technologies. This technology giant hopes to increase advertising sales by integrating AI into its search engines, which is one of its main sources of revenue. Google reported that advertising sales increased by 13% to $61.7 billion in the first quarter ending March 31. The company also stated that it will continue to test and learn new advertising formats and obtain feedback from advertisers. At last week's I/O conference, Alphabet demonstrated how it utilizes AI for innovation in various business areas, including enhanced Gemini chatbots and improvements to its valuable search engine.
Apple rose 0.69%. Apple plans to request a US judge to dismiss a lawsuit filed by the Department of Justice and 15 states in March, accusing Apple of monopolizing the smartphone market, harming small competitors, and pushing up prices. In a letter to New Jersey District Judge Julian X. Nils, Apple stated that it faces fierce competition from mature competitors and denies its ability to charge super competitive prices or limit production. Apple also pointed out that the US Department of Justice is based on an "antitrust liability theory that has not yet been recognized by any court.". The Ministry of Justice previously stated that Apple utilizes market power to obtain more profits from consumers, developers, and other parties, and maintains its illegal monopoly position in the smartphone market. Apple countered that dissatisfied users can easily turn to other competitive platforms without these restrictions.
Microsoft rose 0.87%. At the Developers Conference in Seattle, Microsoft CEO Satya Nadella promoted a series of new tools aimed at encouraging programmers to integrate AI technology into Windows software. These new tools include application programming interfaces (APIs) that simplify developers' use of Microsoft AI technology. Microsoft has stated that 1.8 million developers are currently using its AI generation tool GithubCopilot, which helps programmers improve productivity.
Satya Nadella stated in her keynote speech at the conference that developers are using these new features to change the world around them. Microsoft also provided a detailed introduction to the new features of its CopilotAI software, which supports business productivity applications such as email and Teams video and text chat products. Meanwhile, in order to compete with Nvidia in the AI computing field, Microsoft announced last Thursday that it will provide cloud computing customers with a platform equipped with AMDAI chips. In addition, OpenAI's latest GPT4-o model runs on Microsoft's infrastructure, with development costs 12 times lower than previous versions.
In addition, Microsoft has also launched the Copilot+personal computer series equipped with AI capabilities, which use Qualcomm processors based on the Arm architecture.
BlackRock is optimistic about the Chinese market, Goldman Sachs suggests market volatility may intensify
Large bank stocks generally rose. Citigroup, Bank of America, and JPMorgan Chase rose more than 2%, Goldman Sachs, Wells Fargo, Morgan Stanley, and UBS Group rose more than 1%, while BlackRock fell slightly.
Fan Hua, head of BlackRock Group in China, said that China's capital market has extensive and sufficient investable objects. From the perspective of global allocation, China's capital market provides opportunities for international funds to diversify risks and increase returns. At the same time, Chinese customers have a strong demand for global configuration. In 2020, BlackRock Group established the first foreign-owned public fund in China - BlackRock Fund; In 2021, BlackRock Jianxin Wealth Management Company, one of the first joint venture wealth management companies, was established. "BlackRock Group has been looking for opportunities to increase its footprint in the Chinese market." Fan Hua said that the two companies have made several capital increases since their establishment, and will make relevant arrangements according to the needs of business and product issuance in the future.
Goldman Sachs rose 1.61%. According to the analysis of strategists at Goldman Sachs Group, stock market investors are preparing for an increase in market volatility, especially as Nvidia's upcoming financial report may exacerbate market volatility. Goldman Sachs' risk appetite index reached its highest point since 2021 last week, mainly driven by optimistic expectations of economic growth and monetary policy, but momentum has slowed down.
The Goldman Sachs strategy team pointed out that the options data of the CBOE Volatility Index (VIX) shows an increasing demand for hedging against sudden market declines, despite the indicator falling to historic lows. This indicates that the market expects a low risk of sustained market decline, but is concerned about a sharp increase in volatility in the short term. Goldman Sachs strategist Andrea Ferrario said that due to the high concentration of the market, the impact of specific events has become more important. Taking Nvidia's financial report as an example, the event is scheduled to be released on Wednesday and may have a significant impact on the market.
Energy stocks mostly closed lower. Chevron, ExxonMobil, Petrobras, BP, ConocoPhillips, Western Petroleum, and Shell saw a slight decline, while Murphy Oil saw a slight increase, and US energy saw a rise of over 1%.
Popular Chinese concept stocks generally closed lower. The Nasdaq China Golden Dragon Index fell 2.27%. NetEase fell more than 5%, JD.com fell more than 4%, Bilibili, Ideal Automobile, Baidu, Weibo fell more than 3%, Alibaba and Futu Holdings fell more than 2%, Manbang and iQiyi fell more than 1%, Pinduoduo fell slightly, NIO rose slightly, and Xiaopeng Automobile rose more than 5%.