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U.S. Market Overview:
On Tuesday, the U.S. stock market closed with mixed results, retreating from session highs after inflation data came in hotter than expected, potentially indicating delays in Federal Reserve rate cuts.
The S&P 500 fell by 24 points (-0.4%) to finish at 6,243, while the Nasdaq 100 gained 28 points (+0.13%) to close at 22,884. The Dow, however, dropped 436 points (-0.98%) to end at 44,023.
In terms of sector performance, Technology (XLK) was the only sector to finish in positive territory, while Materials (XLB), Health Care (XLV), and Financials (XLF) lagged behind.
U.S. Economic Developments:
The inflation rate in the U.S. rose by 2.7% year over year in June, surpassing the anticipated growth of 2.6% and up from the 2.4% reported in the previous month. On a monthly basis, inflation increased by 0.3%, aligning with expectations but higher than the 0.1% growth recorded in May.
Core inflation also showed a year-over-year increase of 2.9% in June, meeting expectations and rising from May's 2.8%. Month-over-month, core inflation grew by 0.2%, as anticipated, compared to 0.1% in the prior month.
Additionally, the NY Empire State Manufacturing Index improved to 5.5 in July, exceeding the forecasted rise to -13 from June's -16. This marks the index's first improvement after two consecutive months of decline.
U.S. Equity News:
Nvidia (NVDA) surged by 4.04% after the company reportedly received assurances from U.S. officials that export licenses for its H20 AI chips will be approved, enabling exports to China to resume.
In contrast, BlackRock (BLK) plummeted by 5.88% following the withdrawal of $52 billion by a major client from the firm's index funds, with further withdrawals anticipated from the same client, according to Edward Jones.
Apple (AAPL) saw a slight increase of 0.23% after announcing a $500 million investment in rare earth producer MP Materials (MP), which experienced a significant jump of 19.99% in its stock price following the news.
Wells Fargo (WFC) also faced a decline, falling 5.48%, as its quarterly sales came in roughly in line with expectations.
Oracle (ORCL) rose by 2.48% after announcing plans to invest $3 billion over the next five years in AI and cloud infrastructure in Germany and the Netherlands to address growing demand.
Volatility & Commodities Snapshot:
The VIX index rose 0.18pt (+1.05%) to 17.38 while the US 10 year yield climbed to 4.487%.
In the commodities market, Gold fell 15.42 dollars (-0.46%) to 3328.1 and WTI Crude Oil slipped 0.34 dollars (-0.51%) to 66.64.
Europe Market Overview:
At the European close, major indices in the region ended the day in negative territory.
Germany's DAX fell by 100 points (-0.42%) to 24,060, France's CAC 40 declined by 41 points (-0.54%) to 7,766, and the U.K.'s FTSE 100 dropped by 59 points (-0.66%) to 8,938.
In economic news, Germany's ZEW economic sentiment index rose to 52.7 in July, surpassing expectations of 49.1 and up from 47.5 in June. Additionally, eurozone industrial production increased by 1.7% month-on-month in May, exceeding the anticipated growth of 0.8%, following a revised decline of 2.2% the previous month (originally reported as -2.4%).
Foreign Exchange & Crypto Wrap:
The dollar index added 0.54pts (+0.55%) to 98.622.
EUR/USD declined 62pips (-0.53%) to 1.1601.
GBP/USD slipped 48pips (-0.36%) to 1.3379.
USD/JPY rose 114pips (+0.77%) to 148.84.
USD/CHF climbed 41pips (+0.51%) to 0.8017.
AUD/USD fell 32pips (-0.49%) to 0.6511.
USD/CAD advanced 19pips (+0.14%) to 1.3722. In Canada, the inflation rate jumped 1.9% year over year in June, against an improvement to 1.5% forecasted from May's reported 1.7%. Month over month, inflation grew 0.1%, against an expected decline of 0.3%.
Finally, in the cryptocurrencies market, Bitcoin fell 3759 dollars (-3.13%) to 116462 while Ethereum rose 38 dollars (+1.27%) to 3043.
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