New York City – After reaching new all-time highs, US stocks showed signs of losing momentum as investors awaited new economic data for insights on the state of the economy and the possibility of further interest rate cuts. The Dow Jones Industrial Average and the S&P 500 both dipped into negative territory, while the Nasdaq Composite remained in positive territory.
The main focus now shifts to concerns about a possible recession in the US, prompted by a weaker-than-expected report on consumer confidence. Investors are debating whether the Federal Reserve’s recent rate cut of 0.5% was in response to a slowing economy and what implications further rate cuts may have on the market.
In the housing market, new home sales decreased in August following a significant increase the previous month, with high mortgage rates and elevated prices deterring buyers. However, mortgage applications surged to the highest level since 2022 as homeowners sought to refinance loans amid dropping rates.
Looking ahead, market attention is on the upcoming second quarter GDP report and the PCE index reading, which is a key inflation indicator favored by the Federal Reserve. Additionally, investors are closely monitoring the remarks of Federal Reserve governor Adriana Kugler for insights into the potential size and pace of future rate cuts.
On a positive note, Nvidia shares rose by as much as 3% following a bullish report projecting significant growth in the artificial intelligence market. Other chip stocks, such as Micron and Intel, also saw gains as the technology sector showed strength in the market.
Meanwhile, China’s announcement of a substantial economic stimulus package sparked a rally in commodities, with silver and copper futures surging to new highs. The stimulus is aimed at supporting the Chinese economy amid challenges from a volatile property market and deflationary pressures.
Despite the positive market reactions, there are lingering doubts about whether these measures will be sufficient to revive China’s economy. As markets continue to react to new developments, investors remain cautious amidst global economic uncertainties.