Wall Street Starts Strong, Recovering from Weekly Losses

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Today’s stock market opened on a positive note, with Wall Street aiming to recover some of its losses for the week. Early trading saw the S&P 500 climbing by 0.7% on Thursday, a rebound from the previous day’s volatile session triggered by the Federal Reserve’s announcement regarding interest rates. The Dow Jones Industrial Average surged by 224 points, while the Nasdaq composite gained 1%. Notable performances included Qualcomm exceeding profit and revenue expectations for the quarter, and Carvana impressing analysts with better-than-anticipated results. Meanwhile, Treasury yields displayed mixed movements in the bond market.

Continuing its upward trajectory from Wednesday’s mixed closure, Wall Street remained optimistic as futures for the S&P 500 and the Dow Jones Industrial Average rose by 0.6% and 0.4% respectively before the opening bell.

Federal Reserve Chair Jerome Powell’s remarks on Wednesday hinted at a prolonged timeline for rate cuts, alleviating concerns about an imminent rate hike, which had stirred unease in the market. Powell’s assertion that the Fed was unlikely to raise rates at the upcoming June policy meeting further reassured investors.

Market sentiment had already adjusted expectations for rate cuts this year, scaling down from initial projections of six or more cuts to one or two, if any. Powell’s indication of sustained high rates disappointed some on Wall Street, particularly after earlier Fed indications had suggested three rate cuts in 2024.

In premarket trading, DoorDash experienced an 11% decline after issuing a profit forecast below analyst estimates, coupled with apprehensions regarding escalating operational costs. Conversely, Carvana witnessed a remarkable 38% surge in after-hours trading following its record-breaking car sales in the last quarter.

Peloton saw a pre-bell rise of 7.8% after announcing a restructuring initiative involving a reduction of about 400 employees, constituting 15% of its workforce. Additionally, the company’s CEO Barry McCarthy announced his departure amidst the reorganization efforts.

With the Fed’s rate decision behind them, investors are now turning their attention to labor market data. Later on Thursday, the government is set to release its weekly layoff report, followed by the comprehensive April jobs report on Friday. Recent indicators suggest a softening in the labor market, aligning with the Fed’s objectives in managing inflation.

In European markets, London’s FTSE 100 edged up by 0.4%, while Germany’s DAX slipped by 0.1% and France’s CAC 40 dropped by 0.7%. In Asia, Tokyo’s Nikkei 225 declined by 0.1%, while Hong Kong’s Hang Seng index surged by 2.4%. South Korea’s Kospi dipped by 0.3%, and markets in China remained closed for the Labor Day holiday.

Elsewhere, Australia’s S&P/ASX 200 advanced by 0.2%. In energy trading, U.S. crude rebounded after three days of losses, climbing to $79.71 a barrel, while Brent crude rose to $84.26 a barrel. The euro saw a slight decline against the dollar, priced at $1.0703.

Wednesday’s trading session saw the S&P 500 closing at 5,018.39, down by 0.3%, with the Dow Jones Industrial Average rising by 0.2% to 37,903.29, and the Nasdaq composite losing 0.3% to 15,605.48.

Featured Image: Freepik @ wirestock

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About the author: Stephanie Bedard-Chateauneuf has over six years of experience writing financial content for various websites. Over the years, Stephanie has covered various industries, with a primary focus on tech stocks, consumer stocks, health stocks, and personal finance. This stock lover likes to invest for the long-term. Stephanie has an MBA in finance.