Technology companies, especially those operating in the field of semiconductor chips and artificial intelligence, continue to have an impact on the direction of the markets, led by Nvidia.
After California-based chip maker Nvidia announced profits above expectations in the last quarter, the company’s share price ended the day with a 16 percent increase yesterday. Thus, the company’s market capitalization increased by about 277 billion dollars in one day, capturing Meta’s daily value gain record of 197 billion dollars in this field.
On the other hand, while the uncertainty about when the US Federal Reserve (Fed) will start interest rate cuts continues, verbal guidance from Fed officials is also being monitored.
Yesterday, Fed Vice Chairman Philip Jefferson pointed out that the bank’s strong actions had moved the policy rate into highly restrictive territory, explaining that the tight monetary policy stance was putting downward pressure on economic activity and inflation.
Jefferson said it would probably be appropriate to start lowering the policy rate later this year if the economy develops as generally expected, but said he could not give a timetable because of the risks.
Philadelphia Fed President Patrick Harker said there was a risk that the Fed would cut interest rates too soon.
Stating that the Fed is on the last step of moving towards the 2 percent target in inflation, Harker said that the latest data show uneven progress in slowing inflation.
International Monetary Fund (IMF) Spokesperson Julie Kozack also stated that although inflation is slowing down, it is not yet close enough to the target and urged central banks to be cautious against premature easing in monetary policy.
On the macroeconomic data side, the number of first-time jobless claims in the US decreased by 12 thousand people to 201 thousand in the week ending February 17, recording the lowest level in 5 weeks.
The Purchasing Managers’ Index (PMI) for the manufacturing industry in the country increased by 0.8 points in February to 51.5, the highest level in 17 months, while the service sector PMI decreased by 1.2 points in February to 51.3, the lowest level in 3 months.
Second-hand home sales in the US increased by 3.1 percent in January, exceeding market expectations.
Following these developments, money markets are certain that the Fed will leave the interest rate unchanged in March, while the probability of the bank starting to cut interest rates in May is priced at 23 percent and the probability of starting in June is priced at 60 percent.
However, while the US 10-year bond yield is at 4.33 percent, the dollar index, which has carried its downward trend to the fourth consecutive trading day, is currently hovering at 103.9, down 0.1 percent.
The ounce price of gold, which carried the upward trend to the 7th consecutive trading day, is trading at $ 2,26, up 0.1 compared to its previous close.
While the developments in the Middle East are being closely monitored, the barrel price of Brent oil is currently trading at $ 82.4, 0.3 percent below its previous close, after completing the day at $ 82.7 with an increase of 0.4 percent yesterday.
Yesterday, on the New York stock exchange, the S&P 500 index gained 2.11 percent to 5,087.03 points and the Dow Jones index increased by 1.18 percent to 39,069.11 points, setting a closing record. The Nasdaq index, on the other hand, realized its highest daily closing since November 19, 2021 with 16,041.62 points with a 2.96 percent premium. Index futures contracts in the US started the new day with a positive course.
Europe
While new highs were seen in European stock markets yesterday, today the focus of investors was on the Gross Domestic Product (GDP) data in Germany.
In Europe, the Stoxx Europe 600 index increased by 0.82 percent to 495.1 points, the DAX 40 index in Germany rose by 1.47 percent to 17,370.45 points and the CAC 40 index in France rose by 1.27 percent to 7,911.60 points. The FTSE MIB 30 index in Italy also increased by 1.06 percent to 32,356.26 points, its highest daily close since May 2008.
On the other hand, the minutes of the European Central Bank’s (ECB) January monetary policy meeting revealed that ECB Governing Council members agreed that it was too early to discuss interest rate cuts.
The ECB made a loss for the first time since 2004 due to the interest rate hikes it went through last year as part of the fight against inflation. According to data released yesterday, the Consumer Price Index (CPI) in the Eurozone in January decreased by 0.4 percent on a monthly basis, while it increased by 2.8 percent on an annual basis, in line with expectations.
In addition, the euro/dollar parity, which has carried its upward trend to the eighth consecutive trading day, is currently at 1.0830, just above its previous close.
Asia
While the positive course prevailed in Asian stock markets, except Hong Kong, the Nikkei 225 index in Japan renewed its peak in 1989 with a closing of 39,098.68 points yesterday, while today it will be closed for trading due to the holiday.
On the Chinese side, according to data released today, the effects of the slowdown in economic activity continued as house prices fell by 0.7 percent.
Analysts stated that the Chinese government is expected to continue its steps to support the economy and that the concerns especially in the real estate sector are closely monitored.
Near the close, the Kospi index in South Korea increased by 0.1 percent and the Shanghai composite index in China by 0.1 percent, while the Hang Seng index in Hong Kong lost 0.2 percent.
