Dow Jones closes down 605 points on inflation concerns – Hunsmart

HoonSmart.com>> The US stock market closed, 3 major indices down, the Dow Jones index fell 605 points, concerns about inflation after strong economic data, the purchasing managers index rose, including the manufacturing and services sectors. The Fed may delay a rate cut while Nvidia shows strong operating results, pushing stocks higher. The price of West Texas Intermediate crude fell 70 cents, and European stock markets closed unchanged.

The Dow Jones Industrial Average (DJIA) closed on May 23, 2024 at 39,065.26 points, down 605.78 points or -1.53%, the largest single-day decline in 2024, despite Nvidia's strong revenue outlook, which will send the company's shares higher. But that was overshadowed by economic data that showed inflation remains a concern that could lead to a delay in interest rate cuts by the Fed.

The Standard & Poor's 500 index closed at 5,267.84 points, down 39.17 points, or -0.74%.

The Nasdaq index closed at 16,736.03 points, down 65.51 points, or -0.39%.

Nvidia stock jumped 9.3%, pushing its stock price above $1,000, after announcing stronger-than-expected first-quarter results. Announced a 10-to-1 stock split (split)

But most stocks in the market fell, with more than 400 stocks falling in the Standard & Poor's 500 index, and information technology was the only gainer yesterday.

Stronger-than-expected economic data also dampened the market's rally as investors ruled out chances of an interest rate cut in September. With S&P Global's Purchasing Managers' Index (PMI) including the manufacturing and services sectors, the preliminary reading for May rose to 54.4, the highest level in 25 months, from 51.3 in April. There is also price pressure.

The Labor Department reported that initial claims for unemployment benefits fell by 8,000 last week to 215,000, below the 220,000 that analysts had expected, suggesting the labor market remains strong.

This data makes investors more concerned that the Fed will not cut interest rates quickly. Expectations were lowered again, with CME Group's FedWatch tool indicating that the probability of just one rate cut this year has increased to nearly 58%, compared to two cuts earlier this week. Investors are just 52.2% giving the Fed a 0.25% rate cut at its September meeting, down from 67% last week.

Boeing shares fell 7.55% and lagged behind the Dow Jones. After the company expects that cash flow in 2024 may be negative. Aircraft deliveries in the second quarter did not recover from the first quarter.

European markets closed flat. This is a sign of improved economic activity, and this has prompted investors to lower their expectations for reducing interest rates this year. The positive expectations are offset by strong expectations from Nvidia.

The technology stock rose 1.1%, with semiconductor stocks ASML, Infineon and ASM rising 1% to 2.6% after Nvidia beat quarterly revenue estimates. It announced a stock split and increased quarterly profits by 150% after the stock split

However, the market was under pressure due to rising European bond yields. After the results of the preliminary survey indicated that, business activity in the euro zone grew at the fastest pace in a year in May.

Traders expect a 0.58% interest rate cut by the end of the year, down from the 0.67% expected on Wednesday.

The STOXX 600 index closed at 521.56 points, up 0.38 points, or 0.07%.
The London Stock Exchange FTSE 100 index closed at 8,339.23 points, down 31.10 points, or -0.37%.
The French Stock Exchange CAC-40 index closed at 8,102.33 points, up 10.22 points, or +0.13%.
The German DAX stock market index closed at 18,691.32 points, up 11.12 points, or +0.06%.

The price of West Texas Intermediate crude for July delivery fell 70 cents, or 0.9%, to close at $76.87 a barrel. The price of Brent North Sea crude for July delivery fell 54 cents, or 0.66%, to close at $81.36 per barrel.