US Market On December 4: Wall Street witnessed a strong rally on Wednesday with Dow Jones, S&P 500 and Nasdaq Composite hitting a new lifetime high. The robust bullish trend in US stocks was driven by tech stocks, despite the latest speech of Jerome Powell, chair of the US Federal Reserve who has hinted that FOMC is not in a hurry for rate cuts. The performance also shrugged off the uncertainties surrounding South Korea and France's political crisis.
Fed Cautious!
At a New York Times event, Powell said that the US economy is in good shape, and he does not see any reason currently that will stop the momentum of that.
However, Powell pointed out that in the labor market, the downside risks appear to be less, while growth is stronger than predicted, and inflation has come in a little higher.
That being said, Powell added that FOMC can afford to be slightly more cautious as they try to find neutral.
South Korea Crisis:
Amidst the martial law crisis, South Korea's defence minister Kim Yong-hyun has resigned, as he believed that he was responsible for the impact that the martial law decree created on President Yoon Suk Yeol's government, The South Korea president has accepted Yong-hyun's resignation, while appointed Choi Byung Hyuk, a retired army that was responsible for the protection of South Korea's ambassador to Saudi Arabia.
While the dramatic martial law rule was removed at the early dawn of Wednesday, the woes in South Korea continue to intensify. The parliament has launched a motion for the impeachment of President Yoon over the martial law crisis, however, the latter's People's Power Party has vowed to protest the motion.
France Government:
In another development, the government of France collapsed after it lost a no-confidence vote. In a landslide 331 lawmakers of both the left and right-wing parties namely the New Popular Front Alliance and National Rally voted for a no-confidence motion in the lower house of France. This means that the current Prime Minister Michel Barnier will have to resign from his position.
US Market:
Dow Jones: The Dow Jones Industrial Average or DJIA ended at 45,014.04, up by 308.51 points or 0.69%. The index crossed the 45,000 mark, hitting a new record high of 45,073.63.
S&P 500: The index ended at 6,086.49, higher by 36.61 points or 0.61%. The index also touched its fresh lifetime high of 6,089.84.
Nasdaq Composite: This tech-heavy index closed at 19,735.12, up by 254.21 points or 1.30%. The index had rallied to hit a new lifetime high of 19,741.76.
According to Trading Economics data, this surge was largely fueled by optimism surrounding the AI boom, with major US tech companies highlighting the significant benefits they are reaping from the sector.
Also, Trading Economics pointed out that Salesforce led the way, jumping 11% after surpassing revenue expectations and raising its fiscal-year guidance. Marvell Technology also surged, soaring 23.2% on the back of impressive earnings results. Additionally, major tech stocks posted strong gains, including Nvidia (3.5%), Tesla (1.9%), and Microsoft (1.4%). On the monetary policy front, Fed Chair Powell reiterated on Wednesday that the central bank is in no hurry to cut rates, emphasizing that the US economy remains solid but continues to face inflationary pressures.
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