Wall Street’s impressive recovery from April’s downturns shows signs of slowing, although renewed interest in the market’s most influential players continues to drive US stock gains.
After a sharp rise of approximately 22% from last month’s lows, the S&P 500 showed only a modest increase on Wednesday, with tech mega-corporations once again leading the growth charts. Despite the persistent positive sentiment, the pace of growth has weakened as traders await new catalysts. The dollar weakened amid speculation that President Donald Trump will pressure foreign governments to strengthen their currencies in exchange for trade deals with the US. The S&P 500 rose by 0.2%, Nasdaq 100 added 0.3%, and the Dow Jones Industrial Average strengthened by 0.2%.
Bold Strategy from Trading Giants
Two major Wall Street trading teams are making the same bold strategy for US stocks as trade tensions ease: bet on this year’s biggest losers for quick, short-term returns. The heads of equity trading at Citigroup Inc. and JPMorgan Chase & Co. are particularly optimistic about developments in the coming weeks, especially for small companies, technology hardware manufacturers, and homebuilders, which have lagged behind the broader S&P 500 index during the recent growth.
In the current environment, Stuart Kaiser, who leads Citi’s trading department as head of US equity trading strategy, also prefers shares of companies with weaker financial backgrounds.
With US stock indices already erasing this year’s declines, firms now claim that traders and other speculative investors who missed previous opportunities will be looking for chances to catch up before another wave of tariff-induced turbulence strikes again.
Interesting Market Moments:
- Super Micro Computer Inc. shares strengthened significantly after announcing a multi-year partnership agreement with Saudi Arabian data company DataVolt.
- American Eagle Outfitters Inc. withdrew its full-year outlook after a first quarter marked by discount promotions and inventory write-offs.
- Cboe Global Markets Inc. shares fell after Morgan Stanley doubly downgraded their rating, recommending reduced defensive exposure due to greater-than-expected easing of tariff tensions between China and the US.
- Nucor Corp., North America’s largest steel manufacturer, halted production at some of its plants after detecting unauthorized intrusion into its computer systems.
- Electric vehicle manufacturer Lucid Group Inc., backed by Saudi Arabia, stated that the kingdom should consider imposing tariffs on foreign automobiles to strengthen domestic automobile production.
- Novo Nordisk A/S is collaborating with US biotechnology firm Septerna Inc. on developing obesity medications in tablet form as part of a deal potentially worth up to $2.2 billion.
- Roche Holding AG announced it would need to reconsider planned US investments if President Donald Trump implements an executive order to reduce prescription drug costs.
- Tencent Holdings Ltd.’s revenues grew at the fastest pace in more than three years, confirming investor expectations that the Chinese gaming and social media leader will weather potential global economic cooling in 2025.
Main Market Movements:
Stocks
- S&P 500 index rose by 0.2% (as of 9:31 New York time)
- Nasdaq 100 rose by 0.3%
- Dow Jones Industrial Average rose by 0.2%
- Stoxx Europe 600 fell by 0.1%
- MSCI World Index rose by 0.3%
- Bloomberg Magnificent 7 Total Return Index rose by 0.7%
- Russell 2000 Index fell by 0.2%
Currencies
- Bloomberg Dollar Spot Index fell by 0.3%
- Euro strengthened by 0.3% to $1.1223
- British pound strengthened by 0.1% to $1.3322
- Japanese yen strengthened by 1% to 146.03 per dollar
Cryptocurrencies
- Bitcoin fell by 0.5% to $104,110.03
- Ether fell by 2.9% to $2,612.1
Bonds
- Yield on 10-year US Treasury bonds rose by two basis points to 4.49%
- German 10-year yield remained almost unchanged at 2.68%
- British 10-year yield rose by four basis points to 4.71%
Commodities
- West Texas Intermediate crude oil fell by 0.6% to $63.29 per barrel
- Gold fell by 1.8% to $3,191.10 per ounce
