Recent Developments and Investor Impact: Markets Take a Breather
Decliners outpaced advancers on the New York Stock Exchange 2 to 1 on Tuesday, with the dip continuing into Wednesday.
The Dow Jones Industrial Average (DJI) fell by 200 points or 0.58%. The S&P 500 (SPX) slid 0.42%, while the Nasdaq Composite (IXIC) declined 0.25%. Decliners outpaced advancers on the New York Stock Exchange 2 to 1 on Tuesday, with the dip continuing into Wednesday.
Certain sectors, such as energy, experienced significant losses, with a decline of more than 1%. Prominent companies like Intel (NASDAQ: INTC), Nike (NYSE: NKE), and Boeing (NYSE: BA) also contributed to the Dow’s drop, each falling by more than 3%. On the other hand, homebuilders and certain tech companies managed to outperform. PulteGroup (NYSE: PHM), D.R. Horton (NYSE: DHI), and Lennar (NYSE: LEN) each rose by more than 1%, while Nvidia (NASDAQ: NVDA) also bucked the trend with a rise of over 1%.
Despite the downturn, the stock market has been up, with the S&P 500 posting its best weekly performance since March and the Nasdaq Composite marking its eighth consecutive positive week. This positive trend is despite the Federal Reserve’s decision to skip a June rate hike, breaking its streak of ten consecutive interest rate increases.
Investor bullishness has also risen to 45.2% from 27.4% several weeks ago, the highest level since November 2021. Investors have also absorbed positive housing starts data for May, which surpassed estimates.
Looking ahead, investors were keenly awaiting a Q4 report from FedEx (NYSE: FDX), and companies like PayPal (NASDAQ: PYPL) are on the rise after securing a loan accord with KKR & Co. (NYSE: KKR). Tuesday, FedEx reported:
- New fiscal 2024 outlook, including $1.8 billion of drive cost savings.
- Sees FY24 EPS $16.50-$18.50 vs $18.36 analyst estimate.
- Expects to repurchase $2 billion of FedEx common stock.
PayPal expects $5 billion in buybacks following the deal. Bank of America (NYSE: BAC) suggests that investors seeking exposure to banking stocks could find “attractive risk/reward” in Wells Fargo (NYSE: WFC), Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), and East West Bancorp (NASDAQ: EWBC).
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Disclaimer: Wealthy VC does not hold a position in any of the stocks, ETFs or cryptocurrencies mentioned in this article.
