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06/08/24
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Dip Buying in Tech Pushes US Stocks Higher After Rout
On Tuesday, U.S. stocks moved higher as they recovered somewhat after Monday’s rout although fears remain over an economic slowdown.
The NASDAQ Composite gained 70 points or 0.4%, the S&P 500 index climbed 25 points or 0.5%, and the Dow Jones Industrial Average rose 55 points, or 0.2%.
Worries about a drastic slowdown in economic growth after several underwhelming labor market readings and purchasing managers index, saw the Nasdaq, S&P 500, and DJIA drop 8%, 6%, and 5% respectively in 3 days, the worst 3-day performance in over 2 years.
Weak economic data increased concerns that the Fed has kept interest rates high for too long and that cuts by the central bank now would not be sufficient to help the economy make a soft landing.
The CME Fedwatch tool showed markets increased their expectations for a 0.5% cut in Sept. and were pricing in at least 1% in rate cuts for the year.
Caterpillar stock was 1% higher after it reported an increase in quarterly adjusted profit, pushed higher by resilient demand for its bigger excavators and other construction equipment due to increased infrastructure spending in the U.S.
Super Micro Computer will also report on Tuesday and will likely offer more clues on demand from the AI industry.
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