Oil prices decreased for the 5th consecutive session. AI companies support the NASDAQ index

June 4, 2024

At Monday’s close, the Dow Jones Index (US30) was down 0.30%, while the S&P 500 Index (US500) added 0.11%. The NASDAQ Technology Index (US100) closed positive 0.56% yesterday. The general market’s gains were limited as economic concerns pressured stocks after activity in the US manufacturing sector unexpectedly declined last month. In addition, energy stocks came under pressure after WTI crude oil prices fell more than 3% to a 3-month low. However, the strengthening of technology stocks helped the sector’s growth. Nvidia (NVDA), for example, closed up more than 4% and led chip stocks higher after the company announced at the Computex conference in Taiwan a new generation of artificial intelligence chips by 2025 and a next-generation platform under development called Rubin by 2026.

Minneapolis Fed President Kashkari’s comments were hawkish. They supported the dollar when he said the Fed will likely hold interest rates for an “extended period” until new economic data convinces policymakers that inflation is declining. Markets estimate the odds of a 25 bps rate cut at 1% at the June 11-12 FOMC meeting, 15% at the next meeting on July 30-31, and 51% at the next September 17-18 meeting.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) rose by 0.60%, France’s CAC 40 (FR40) closed higher by 0.06%, Spain’s IBEX 35 (ES35) added 0.66%, and the UK’s FTSE 100 (UK100) closed negative 0.15% on Monday.

European equity markets opened lower on Tuesday, following a global decline among global peers as disappointing US industrial production data weighed on market sentiment. Investors are also cautiously awaiting the European Central Bank’s decision this week, which is expected to cut interest rates for the first time since 2019. Meanwhile, markets will see if last week’s Eurozone inflation data will influence the ECB’s decision.

On Monday, silver (XAGUSD) gained support on strengthening manufacturing activity in China after the May Caixin PMI rose by 0.3 to 51.7, the highest reading in 23 months and a positive for industrial metals demand.

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WTI crude oil prices fell below $74 a barrel on Tuesday, dropping for the fifth consecutive session to the lowest level in four months amid concerns that global supply could increase later this year. OPEC+ agreed on Sunday to extend most supply cuts through 2025 but opened the door for voluntary cuts by eight member countries to be phased out starting in October. More than 500,000 barrels a day are expected to return to the market by December, and 1.8 million barrels a day by June 2025.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) gained 1.13% over yesterday, China’s FTSE China A50 (CHA50) climbed 0.55%, Hong Kong’s Hang Seng (HK50) rose by 1.79%, and Australia’s ASX 200 (AU200) was positive 0.77%.

On Tuesday, the S&P/ASX 200 Index (AU200) fell 0.05% to below 7,760, interrupting two days of gains. This was helped by losses in mining and energy stocks amid lower commodity prices. Investors are also awaiting Australian GDP data this week to gauge the current state of the economy and potential implications for domestic monetary policy.

S&P 500 (US500) 5,283.40 +5.89 (+0.11%)

Dow Jones (US30) 38,571.03 −115.29 (−0.30%)

DAX (DE40) 18,608.16 +110.22 (+0.60%)

FTSE 100 (UK100) 8,262.75 −12.63 (−0.15%)

USD Index 104.11 −0.56 (−0.54%)

Important events today:

– Switzerland Consumer Price Index (m/m) at 09:30 (GMT+3);
– German Unemployment Rate (m/m) at 10:55 (GMT+3);
– US JOLTs Job Openings (m/m) at 17:00 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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Oil prices decreased for the 5th consecutive session. AI companies support the NASDAQ index