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(Bloomberg) — A renewed rally in technology giants led to a rebound in stocks as bond yields fell ahead of Friday’s jobs report and the Federal Reserve will put interest rate hikes on hold.
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After a brief hiatus from the massive technological boom fueled by the artificial intelligence frenzy, the team is back in full force. Nvidia Corp. It rose 5%, matching the gains in the Nasdaq 100. In addition to the obsession with anything AI-related, which sent the megacap up 17% in May, the group got a lift after weak factory data prompted a slide in Treasury rates.
“One can rightly ask how much more ‘May’ we have,” said Nicholas Collas, founder of DataTrek Research, adding that the US tech giant is the only place in the world with the largest amount of positive equity. “The old Keynesian adage, ‘Markets can remain more irrational than they can remain solvable,’ feels particularly relevant in the current investment environment.”
The S&P 500 rose nearly 1% on Thursday, retaking the 4,200 mark. Bank of America’s contrarian indicator, which rounds out Wall Street strategists’ allocation recommendations to announce a “buy” signal from 2017. In the next 12 months.
The tech rebound lifted C3.ai Inc. from session lows, with the AI software company up nearly 24 percent in half. Broadcom Inc.’s results after the closing bell are set to be the next indication that the industry’s rally is getting ahead of itself, with several analysts citing the potential for i-fueled earnings growth.
‘Very brave’
According to Matt Maley at Miller Tabak, no matter how bullish investors are about the potential of artificial intelligence, they should be prepared to weather it down the road.
“Investors should be very cautious and very smart after these recent parabolic developments,” said Maley. “Sometimes, deep corrections are long-lasting, as we saw after the dot-com bubble burst. Sometimes they last only a few weeks, and new, much stronger rallies follow and push stocks even higher.
In addition to the AI theme, traders braced for Friday’s monthly jobs report, with forecasts projecting moderation in the hiring pace, allowing the Fed to pause its tightening policy in June.
Philadelphia Fed President Patrick Harker said the U.S. central bank is close to a stable level in its efforts to raise interest rates and lower inflation further.
Meanwhile, the US Senate has threatened to delay action on the debt ceiling deal forged by President Joe Biden and House Speaker Kevin McCarthy with some senators approaching a default deadline.
In other corporate news, Salesforce Inc. The software company collapsed after giving insufficient sales forecasts. Dollar General Corp. fell after the discount retailer cut its annual profit forecast. Nordstrom Inc. The earnings came shortly after the department-store chain’s quarterly revenue and profit estimates.
Some of the major activities in the markets are-
Shares
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The S&P 500 was up 0.9 percent at 1:10 p.m. New York time.
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The Nasdaq 100 rose by 1.2%
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The Dow Jones industrial average rose 0.6 percent.
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The MSCI world index increased by 1.1%.
Currencies
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The Bloomberg Dollar Spot Index was down 0.6 percent.
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The euro rose 0.6% to $1.0758.
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The British pound rose 0.7% to $1.2531.
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The Japanese yen rose 0.4% to 138.79 per dollar.
Crypto currencies
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Bitcoin fell 0.5% to $26,987.12
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Ether rose 0.3 percent to $1,871.83.
Bonds
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The 10-year Treasury yield fell three basis points to 3.61%
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Germany’s 10-year yield fell three basis points to 2.25%
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Britain’s 10-year yield fell seven basis points to 4.12%
Goods
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West Texas Intermediate crude rose 3.9 percent to $70.76 a barrel.
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Gold futures rose 0.7% to $1,995.40 an ounce.
This story was produced with the help of Bloomberg Automation.
–Assisted by Emily Graffeo, Vildana Hajrich, Peyton Forte and Isabelle Lee.
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