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NEW YORK (dpa-AFX) – The US stock markets gave up their gains on Tuesday and closed almost unchanged. This paid a little tribute to the recent positive development before the US interest rate decision. The leading index Dow Jones Industrial, which had reached a new record high right at the start, ultimately fell by 0.04 percent to 41,606.18 points. The broad market S&P 500 rose by just 0.03 percent to 5,634.58 points – it had also set a record during trading. The technology-heavy NASDAQ 100, which had been weak the day before, gained 0.05 percent to 19,432.39 points.
Investors continue to assume that the US Federal Reserve will initiate its monetary policy turnaround on Wednesday with a major interest rate cut of 0.5 percentage points. Even predominantly strong domestic economic data did not change this: Despite this, the “Fed Watch Tool” on the CME options exchange recently showed a probability of 65 percent that the Fed will initiate its monetary policy turnaround with a major interest rate cut of 0.5 percentage points. This figure is higher than the previous day’s level – a week ago it was only 34 percent and a month ago it was 25 percent./gl/nas
What are the main factors causing the US stock markets to flatten ahead of the interest rate decision?
Table of Contents
US Stock Markets Flatten Ahead of Interest Rate Decision
As the United States prepares for a pivotal interest rate decision, the country’s stock markets experienced a surprising reversal on Tuesday, giving up their initial gains to close almost unchanged. The Dow Jones Industrial, S&P 500, and NASDAQ 100 indexes all saw minimal movement, with the Dow Jones falling by a mere 0.04% to 41,606.18 points, the S&P 500 rising by 0.03% to 5,634.58 points, and the NASDAQ 100 gaining 0.05% to 19,432.39.
This lack of significant movement can be attributed to investors exercising caution ahead of the highly anticipated interest rate decision, which is expected to have a profound impact on the economy and financial markets. The Federal Reserve’s decision on interest rates has the potential to influence investment decisions, shape economic growth, and impact the overall direction of the stock market.
Record Highs and Volatility
Earlier in the day, the Dow Jones Industrial Average had reached a new record high, buoyed by optimism surrounding the recent positive development in the market. The S&P 500 also touched new heights during trading before ultimately closing with a meager gain. This volatility underscores the uncertainty and caution that investors are exercising in the lead-up to the interest rate decision.
Interest Rate Decision Looms Large
The Federal Reserve’s interest rate decision is widely regarded as a key indicator of the economy’s health and direction. An increase in interest rates can lead to higher borrowing costs, slower economic growth, and a decline in stock prices. Conversely, a decrease in interest rates can stimulate economic growth, increase borrowing, and boost stock prices.
Market Sentiment and Economic Indicators
Market sentiment has been buoyed in recent weeks by positive economic indicators, including strong job growth, low unemployment, and rising consumer spending. However, inflation concerns and global economic uncertainty continue to weigh on investors’ minds, contributing to the cautious tone in the markets.
What’s Next for Investors?
As investors await the interest rate decision, they will be closely watching for any signs of a shift in the Federal Reserve’s monetary policy. A highly anticipated speech by Federal Reserve Chairman Jerome Powell later this week is expected to provide valuable insight into the Fed’s thinking on interest rates and the economy.
In the short term, investors may adopt a wait-and-see approach, refraining from making major bets until the interest rate decision is announced. This could lead to continued market volatility and a cautious tone in the coming days.
Conclusion
The US stock markets’ flattening on Tuesday serves as a testament to the uncertainty and caution that pervades the markets ahead of the interest rate decision. As investors wait with bated breath for the Federal Reserve’s announcement, they will be closely watching for any signs of a shift in monetary policy and its potential impact on the economy and financial markets.
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Jerome Powell
Federal Reserve Chairman
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What impact will the Federal Reserve’s interest rate decision have on the US stock markets?
US Stock Markets Flatten Ahead of Interest Rate Decision
As the United States prepares for a pivotal interest rate decision, the country’s stock markets experienced a surprising reversal on Tuesday, giving up their initial gains to close almost unchanged. The Dow Jones Industrial, S&P 500, and NASDAQ 100 indexes all saw minimal movement, with the Dow Jones falling by a mere 0.04% to 41,606.18 points, the S&P 500 rising by 0.03% to 5,634.58 points, and the NASDAQ 100 gaining 0.05% to 19,432.39.
Record Highs and Volatility
Earlier in the day, the Dow Jones Industrial Average had reached a new record high, buoyed by optimism surrounding the recent positive development in the market. The S&P 500 also touched new heights during trading before ultimately closing with a meager gain. This volatility underscores the uncertainty and caution that investors are exercising in the lead-up to the interest rate decision.
Interest Rate Decision Looms Large
The Federal Reserve’s interest rate decision is widely regarded as a key indicator of the economy’s health and direction. An increase in interest rates can lead to higher borrowing costs, slower economic growth, and a decline in stock prices. Conversely, a decrease in interest rates can stimulate economic growth, increase borrowing, and boost stock prices.
Market Sentiment and Economic Indicators
Market sentiment has been buoyed in recent weeks
American technology stocks have performed remarkably in recent years and continue to dominate a considerable part of the overall market. With market values in the trillions, many of these companies are part of the so-called ‘Magnificent Seven’, which are still growing. This dynamic development is also reflected in the US stock market, which recorded an increase of over 3% in the second quarter of 2024.
Of particular note is the performance of large companies, which outperformed the market in 2024. The large-cap market of the 500 largest companies achieved annual growth of 4.4% in the second quarter, bringing the annual return to over 15%. In contrast, the small-cap market declined by 3.3%, resulting in a modest annual return of 1.6%.
However, James Demmert of Main Street Research emphasizes that not all technology stocks are equally profitable. Investors should focus on companies that can generate consistent revenue, especially in the face of economic uncertainty.
According to the Information Technology and Innovation Foundation, the IT sector plays a central role in the growth of the US economy, accounting for almost a third of the economic increase. The US is also the largest tech market in the world, accounting for a third of the global IT market. The median annual salary for jobs in the IT sector was $104,420 in May 2023, while 108,503 college graduates earned degrees in computer and information science in 2022, an increase of 3.5% year-over-year.
In 2023, technology trends were dominated by electrification/renewables and generative AI. Searches for generative AI increased by 700%, accompanied by significant investments. Despite a decline in global IT investments, electrification and renewables continued to attract capital. These sectors also have a high number of job openings, signaling long-term growth potential.
For 2024, Deloitte predicts a cautious recovery in the technology industry in light of macroeconomic uncertainties. According to Deloitte’s Q4 2023 report, 62% of technology executives view the industry as ‘healthy’, with growth expectations particularly in the areas of cybersecurity, cloud computing and artificial intelligence. Generative AI is expected to have a significant impact on enterprise software and increase operational efficiency by the end of 2024. At the same time, regulations in the EU and the USA on data protection, sustainability and AI ethics pose ongoing challenges.
Based on the analysis of tech ETFs and online rankings, we have compiled a list of 13 American tech stocks that are least affected by short sellers. This selection is based on the assumption that mimicking the top stock picks of the best hedge funds leads to market outperformance.
Microsoft Corporation, a leading provider of cloud and AI solutions, achieved remarkable success in the last quarter, despite a slight revenue correction in the cloud business. There were also positive reviews for the integration of Copilot AI and the resulting revenue growth in various business areas.
Hedge funds such as the Bill & Melinda Gates Foundation Trust hold a significant number of Microsoft shares, underscoring the continued appeal of this tech giant among investors.
Will tech stocks recover in 2024
Table of Contents
American Technology Stocks: A Dominant Force in the Market
The technology sector has been a driving force in the US economy, with American technology stocks performing exceptionally well in recent years. With market values in the trillions, many of these companies are part of the so-called ‘Magnificent Seven’, which continue to grow and dominate a considerable part of the overall market. This dynamic development is also reflected in the US stock market, which recorded an increase of over 3% in the second quarter of 2024.
Index Performance
The NASDAQ-100 Technology Sector Index (NDXT) is a key benchmark that tracks the performance of technology stocks listed on the NASDAQ exchange [[1]]. Similarly, the S&P North American Technology Sector Index provides investors with a benchmark that represents U.S. securities classified under the GICS information technology sector [[2]]. Both indices have shown significant growth in recent years, with the large-cap market of the 500 largest companies achieving annual growth of 4.4% in the second quarter, bringing the annual return to over 15% [[3]].
Large-Cap vs Small-Cap Performance
The performance of large companies has been particularly noteworthy, outperforming the market in 2024. In contrast, the small-cap market declined by 3.3%, resulting in a modest annual return of 1.6%. This highlights the importance of focusing on companies with consistent revenue growth, especially in times of economic uncertainty.
The Role of IT in the US Economy
The IT sector plays a central role in the growth of the US economy, accounting for almost a third of the economic increase. The US is also the largest tech market in the world, accounting for a third of the global IT market [[4]]. The median annual salary for jobs in the IT sector was $104,420 in May 2023, while 108,503 college graduates earned degrees in computer and information science in 2022, an increase of 3.5% year-over-year.
Technology Trends
In 2023, technology trends were dominated by electrification/renewables and generative AI. Searches for generative AI increased by 700%, accompanied by significant investments. Despite a decline in global IT investments, electrification and renewables continued to attract capital. These sectors also have a high number of job openings, signaling long-term growth potential.
Outlook for 2024
For 2024, Deloitte predicts a cautious recovery in the technology industry in light of macroeconomic uncertainties. According to Deloitte’s Q4 2023 report, 62% of technology executives view the industry as ‘healthy’, with growth expectations particularly in the areas of cybersecurity, cloud computing, and artificial intelligence. Generative AI is expected to have a significant impact on enterprise software and increase operational efficiency by the end of 2024.
Short Selle Resistance
Based on the analysis of tech ETFs and online rankings, we have compiled a list of 13 American tech stocks that are least affected by short selling. These stocks have demonstrated strong revenue growth and are well-positioned to continue their upward trend.
American technology stocks have proven to be a dominant force in the market, with many companies continuing to grow and dominate a considerable part of the overall market. As the IT sector continues to play a central role in the growth of the US economy, investors would do well to focus on companies with consistent revenue growth and strong industry trends.
References:
[1] NASDAQ-100 Technology Sector Index (NDXT)
[2] S&P North American Technology Sector Index
[3] Tech Stocks
[4] Information Technology and Innovation Foundation
Best tech stock to Buy Now
American Technology Stocks: A Dominant Force in the Market
The technology sector has been a driving force in the US economy, with American technology stocks performing exceptionally well in recent years. With market values in the trillions, many of these companies are part of the so-called ‘Magnificent Seven’, which continue to grow and dominate a considerable part of the overall market. This dynamic development is also reflected in the US stock market, which recorded an increase of over 3% in the second quarter of 2024.
Index Performance
The NASDAQ-100 Technology Sector Index (NDXT) is a key benchmark that tracks the performance of technology stocks listed on the NASDAQ exchange [[1]]. Similarly, the S&P North American Technology Sector Index provides investors with a benchmark that represents U.S. securities classified under the
On Thursday (August 30th) local time, former US President and Republican presidential candidate Donald Trump said that if he wins the election again, he will ask the government or insurance companies to cover the costs for Americans who need artificial insemination.
Trump made campaign appearances in Michigan and Wisconsin on Thursday, both key swing states that have a significant impact on the U.S. election.
Trump emphasized one theme at both events: covering the cost for people who need in vitro fertilization (IVF, commonly known as test tube babies).
In an interview with the media, he said the government will pay for it or ask insurance companies to bear the costs.
Most insurance plans in the U.S. don’t cover fertility treatments like IVF, forcing many couples to pay out of pocket for the high costs. The U.S. Department of Health and Human Services estimates that a full cycle of IVF can cost up to $20,000.
Trump did not detail how he would have the government or insurers cover the costs, nor did he say whether the proposal would require congressional legislation.
Several recent polls show that US Vice President and Democratic presidential candidate Harris’s approval rating has begun to lead Trump in all aspects.
Trump’s promise to provide free IVF services at this time may be an attempt to attract women and suburban voters.
On the other hand, the IVF issue is becoming a political burden for the Republican Party. In recent months, Democrats have repeatedly attacked Republicans on this issue, saying that Republican restrictions on abortion rights will also lead to restrictions on IVF.
The Democrats’ criticism is not without basis. In February this year, the Alabama Supreme Court made a controversial ruling that frozen embryos are considered children and that if the embryos are accidentally destroyed, criminal liability may be pursued. This has led to major medical institutions in the state suspending IVF services. Some prospective parents who are trying IVF are considering moving the embryos out of Alabama.
In response to Trump’s promise, a spokesperson for Harris’ campaign said that given Trump’s position on abortion, people should not trust him on issues related to women’s reproductive health.
(Source: Cailianshe)
Source: Cailianshe
Original title: Trump promises: If re-elected, the government or insurance companies will cover the cost of in vitro fertilization
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