Wall Street Close: Technology shares back Nasdaq to buck the post-Fed downtrend

US equities closed mixed amid upbeat tech shares battle weaker US inflation expectations.
DXY bulls keep reins, US Treasury yields, gold prices fall.
FANG propelled Nasdaq, S&P 500 trim major losses but DJI drops 0.60%.
US Jobless Claims rose, Philadelphia Fed activity data eased.

Anil Panchal FXStreet

Despite recovering by the day’s end, US shares closed mixed on Thursday as markets digest the Fed’s rate hike signals. Even so, downbeat inflation expectations and Treasury yields help technology shares, which in turn back Nasdaq to tease the record high.

That said, Dow Jones Industrial Average (DJI) loses the most, down 210.22 points or 0.62%, to 33,823.45 while S&P 500 came in second, despite the day-end recovery, with a loss of 1.84 points or 0.04% to 4221.84. Alternatively, Nasdaq emerged as the day’s clear winner with 121.67 points, or 0.87%, upside to 14,161.35.

US inflation expectations, per the 10-year breakeven inflation rate of the St. Louis Federal Reserve (FRED), dropped to the lowest in three months, dragging down the US 10-year Treasury yield by 5.8 basis points (bps) to 1.51% at Thursday’s closing.

Talking about the data, US Initial Jobless Claims rose well beyond 359K forecast and 375K (revised) prior to 412K for the week ended on Jun 11. Further, Philadelphia Fed Manufacturing Survey for June eased from 31.0 expected to 30.7.

It’s worth noting that shares of global technology leaders like Facebook, Amazon, Netflix and Google, commonly known as FANG, rose anywhere between 1.0% and 2.0%. Further, global chipmaker Nvidia jumped over 5.0% after Jefferies upwardly revised the price target.

Moving on, a lack of major data/events can offer a dull closing to the week but any surprises, mainly relating to the Fed rates and/or infrastructure spending, won’t be taken lightly. It’s important to know that the US government’s announcement of a national holiday on June 19 backs Federal offices to stay off on Friday but bonds and shares will continue trading normally.

Read: Forex Today: Dollar’s rally on pause amid extreme overbought conditions

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks

Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.

Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.