US markets were overshadowed on Thursday by softer than expected results from Salesforce and a pull back in the Nvidia share price as the rally finally ran out of steam. Investors were also cautious ahead of the release tomorrow of key U.S. inflation data.
The Dow Jones closed down 0.86 per cent, the S&P 500 lost 0.6 per cent and the Tech heavy Nasdaq fell 1.08 per cent as Tech names led the market lower.
On a weekly basis, the S&P 500 has lost around 1.3 per cent, the Nasdaq has given up 1.1 per cent and the Dow has tumbled more than 2 per cent.
Investor sentiment took a hit as Salesforce shares collapsed 19.7 per cent after surprising the market by missing revenue expectations for the fiscal first quarter and providing weaker guidance going forward. Best Buy & Kohls also missed earnings expectations adding to the negative sentiment.
AI juggernaut Nvidia fell more than 3 per cent as its share price rally finally ran out of steam. Microsoft followed Nvidia lower closing down more than 3 per cent for its worst day since October.
On the rates front, the move up in the 10-year Treasury yield has hurt investor sentiment this week. On Thursday the yield pulled back below 4.6 per cent, however, it remained above the key 4.5 per cent level.
Despite the rocky week, the indexes are all on track to end the trading month, which also concludes with Friday’s closing bell, higher. The Nasdaq Composite and S&P 500 have jumped nearly 7 per cent and 4 per cent, respectively, in May. The Dow has risen 0.8 per cent in the month. All three indexes hit record highs in May.
Traders are looking toward Friday’s release of the personal consumption expenditures price index report for April, which is the Federal Reserve’s preferred inflation gauge. Inflation is expected to come in at 2.7 per cent for April, according to the Dow Jones estimate, still above the central bank’s 2 per cent target.
The small-cap Russell 2000 surged 1 per cent on Thursday, a rare event in which smaller stocks outperformed larger ones during the current bull market. Analysts are now focused on the forthcoming release of April’s personal income, spending, and price reports, anticipating a 0.2 per cent increase in the personal consumption expenditures price index excluding food and energy, which would offer insights into underlying inflation.
Shifting to US sectors, all sectors closed higher except for Communication Services and Technology. Real Estate was the best performer, closely followed by Utilities.
Futures
The SPI futures are pointing to a 0.7 per cent gain.
Currency
One Australian dollar at 7.30am was buying 66.33 US cents.
Commodities
Gold has added 0.10 per cent. Silver has lost 2.59 per cent. Copper has fallen 2.77 per cent. Oil has fallen 1.67 per cent.
Figures around the globe
European markets closed higher. London’s FTSE gained 0.59 per cent, Frankfurt added 0.13 per cent, and Paris closed 0.55 per cent higher.
Turning to Asian markets, Tokyo’s Nikkei lost 1.30 per cent, Hong Kong’s Hang Seng fell 1.34 per cent while China’s Shanghai Composite closed 0.62 per cent lower.
Yesterday, the Australian share market closed 0.49 per cent lower at 7,628.20.
Ex-dividends
Metrics Income (ASX:MOT) is paying 1.27 cents unfranked
Metrics Master(ASX:MXT) is paying 1.35 cents unfranked
Pengana Int Equ (ASX:PIA) is paying 1.35 cents fully franked
Dividends payable
Acrow Ltd (ASX:ACF)
Autosports Group Ltd (ASX:ASG)
Kogan.com Ltd (ASX:KGN)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
