The bounce in technology companies helped U.S. markets close higher on Thursday, recovering some of their previous momentum. Volatility also decreased to record lows ahead of a busy economic and policy schedule the following week.
A new post-pandemic record low was reached for the CBOE Volatility index, also referred to as Wall Street’s fear barometer.
According to David Bianco, Americas Chief Investment Officer for asset management DWS Group, “What you are really seeing in the vol market is an unwillingness to engage.” Investors are just paralyzed, I’m afraid.
A week from now, the Federal Reserve will hold its policy meeting and inflation statistics will be the main topics of discussion among investors.
According to CME Group’s Fedwatch tool, traders have accounted for a 73% possibility that the U.S. central bank will maintain interest rates in the current 5%-5.25% range at its monetary policy meeting on June 13–14. In July, they predict a 50% possibility of a rate increase.
After a steep increase in weekly unemployment claims indicated a deteriorating labor market, the two-year Treasury yield US2YT=RR, which often moves in lockstep with short-term rate expectations, dropped from one-week highs to 4.51%.
The first day of the Fed meeting, June 13, is when the U.S. Labour Department is scheduled to disclose inflation statistics. The data is predicted to reveal that while consumer prices marginally declined in May, core prices remained stable.
After sacking its CEO and reporting a larger-than-anticipated quarterly loss, GameStop Corp. saw its stock plummet 17.89%, and billionaire investor Ryan Cohen was named executive chairman.
Consumer discretionary led the way among the 11 key S&P sectors, but the real estate and energy indexes fell, with the latter being hurt by a decline in oil prices.
Following Piper Sandler’s $500 price target increase for the company, Adobe increased by 4.95%. The developer of Photoshop software announced that it was promoting its “Firefly” AI technology to big corporations.
After Zhu Jiang, the head of Lucid Group’s operations in China, said that the firm was getting ready to join the biggest car market in the world, shares of the American luxury electric vehicle manufacturer fell by 1.88%.
On the New York Stock Exchange, advancing issues outweighed falling ones by a 1.16-to-1 ratio; on the Nasdaq, advancing items were in the lead by a 1.02-to-1 ratio.
The Nasdaq Composite registered 71 new highs and 43 new lows, while the S&P 500 set 12 new 52-week highs and two new lows.