Tech earnings-driven profit selling halts Nasdaq's upward climb
Rewritten Article:
Nasdaq Hit by AI Sector Profit-Taking, Tech Rally Slows Down
In the financial world, a laid-back pessimism lingers, but the Nasdaq is experiencing a minor setback after its recent surge. A mega merger sends Foot Locker's stock skyrocketing by almost 90 percent.
U.S. financial markets have shown signs of caution. The major indices ended with mixed results: the Dow Jones rose 0.7 percent to 42,323 points, the broad-spectrum S&P 500 added 0.4 percent to 5,917 points, while the tech-dominated Nasdaq slipped 0.2 percent to 19,112 points due to profit-selling in the AI sector.
The post-tension relief in international trade relations is dwindling, traders pointed out. The ongoing trade war with high tariffs imposed by U.S. President Donald Trump continues to cast a shadow on the industry. According to Ellen Zentner, chief U.S. economist at Morgan Stanley Wealth Management, "Although the de-escalation with China, the trade story isn't over yet. It'll take some time for the tariffs to show up in economic data."
Walmart Warns of Cost Hikes, Stock Drops
The U.S. production remained static in April, matching the previous month's figure. The U.S. retail sector performed better than anticipated, with revenues climbing 0.1 percent from the preceding month, despite uncertainty due to trade conflicts. Walmart, the American retail titan, performed better than expected in the quarter but issued a price increase warning. Its stock closed down 0.5 percent.
The billion-dollar consolidation of Foot Locker and rival Dick's Sporting Goods gave a lift to Foot Locker's stock, which jumped 85.7 percent. Dick's is offering $24 in cash or 0.1168 shares of Dick's stock for each Foot Locker share. Dick's stock lost 14.6 percent.
In the tech sector, Cisco's stock increased 4.8 percent. The American network equipment maker boosted its annual projection, citing continued robust demand for data centers supporting artificial intelligence (AI). A late-night report by The Wall Street Journal influenced Meta's stock, which closed down 2.3 percent. The newspaper reported that the debut of its top AI, "Behemoth," is being delayed due to concerns over AI capabilities.
UnitedHealth's stock plummeted 10.9 percent to a five-year low after The Wall Street Journal reported potential fraud allegations. The U.S. Justice Department is reportedly launching a criminal investigation into potential Medicare fraud involving UnitedHealth, though the company denies any knowledge of this.
Potential Iran Deal Drives Oil Prices Down
Suspicions of a nuclear deal between the U.S. and Iran pushed down prices for the North Sea Brent crude and U.S. WTI crude by more than 2 percent, to $64.68 and $61.80 per barrel, respectively. U.S. President Trump stated that a deal with Tehran is near, which could lead to more Iranian oil entering the market.
The Dollar Index traded around 0.2 percent lower on the international exchange market at 100.8 points. Adjustments in the market could be imminent due to shifting perspectives from the U.S. Federal Reserve in the coming months. Fed Chair Jerome Powell spoke of the significantly altered economic landscape over the past five years. The central bank is currently reassessing its monetary policy strategy, which was last adjusted in 2020 during the COVID-19 pandemic, prioritizing full employment at that time.
Read more about the latest stock market updates here.
Source: ntv.de, ino/rts
- Dow Jones
- Wall Street Buzz
- Stock Figures
- Stock Transactions
- The tech-dominated Nasdaq could potentially improve its current position due to a reevaluation of the employment policy, potentially focusing on the integration of artificial-intelligence in business investment and technology.
- In light of the slipping Nasdaq and the ongoing cautious approach in U.S. financial markets, it would be prudent for businesses to review their community policy, ensuring transparency and stability in the face of market fluctuations.
- As profit-taking persists in the AI sector, financial institutions could consider a diversification of their employment policy, reallocating resources to other sectors showing promising growth, such as data centers supporting artificial-intelligence.
