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S&P 500 and Nasdaq Hit New Highs as Fed Holds Rates Steady


S&P 500 and Nasdaq Reach New Highs as Fed Holds Rates Steady

US markets closed mixed on Wednesday, with the S&P 500 and Nasdaq reaching new record highs. The Federal Reserve maintained interest rates and hinted at only one rate cut this year.

Fed Chair Jerome Powell stated that no specific rate cut path has been promised. May’s US CPI data showed rapid cooling inflation, increasing investor bets on Fed rate cuts.

Apple closed up 2.9%, reaching a market value of $3.267 trillion. The stock briefly surpassed Microsoft to become the largest US company by market cap. This week, Apple announced updates to iOS 18, iPadOS 18, and watchOS 11, and unveiled a partnership with OpenAI to integrate ChatGPT, driving the stock’s surge.

The Federal Reserve’s latest decision kept the federal funds rate target at 5.25% to 5.50%, in line with market expectations. Renowned analyst Mohamed El-Erian questioned if the Fed’s economic outlook fully reflected the day’s lower CPI data or if the decision was made prior.

US Stocks

Fundamental Analysis: 

Major tech stocks mostly rose, with Tesla and Nvidia gaining over 3%, and Apple up more than 2%, both setting new highs. Microsoft rose over 1%, while Netflix, Google, and Meta saw slight increases. Amazon dipped slightly.

The semiconductor and aviation sectors led gains, with ARM up over 8%, TSMC and Micron Technology rising over 4%, and both setting new highs. ASML and Qualcomm increased by more than 3%, and Norwegian Cruise Line gained over 2%.

Popular Chinese stocks had mixed performances, with the Nasdaq Golden Dragon China Index down 0.13%. Bilibili rose over 3%, Pinduoduo over 2%, and Vipshop, JD.com, Baidu, NetEase, and Alibaba posted modest gains. Futu Holdings dropped over 1%, while Weibo, Full Truck Alliance, Li Auto, Tencent Music, iQiyi, Nio, and XPeng saw minor declines.

Technical Analysis: 

(S&P 500 Index, 1-day chart) 

Market Trends: 

  • Dow Jones: Down 35.21 points, or 0.09%, to 38,712.21.
  • Nasdaq: Up 264.89 points, or 1.53%, to 17,608.44.
  • S&P 500: Up 45.71 points, or 0.85%, to 5,421.03.

Hong Kong Stock Market

 Fundamental Analysis: 

Hong Kong’s three major indices rose. Tech stocks generally increased, with Tencent, Meituan, JD.com, and Xiaomi up more than 1%, while NetEase fell over 1%. Auto stocks were mixed, with BYD up over 7%. Apple-related stocks continued to rise, with Q Technology up more than 9%.

Semiconductor stocks remained active, with Hua Hong Semiconductor up over 6%. Home appliance stocks fell, with Hisense Home Appliances down nearly 5%. Gold stocks weakened, with Zhaojin Mining down almost 3%.

Semiconductor stocks remained strong, with Hua Hong Semiconductor up over 6%. Morgan Stanley noted that Hua Hong’s wafer fab utilization exceeded 100% and predicted a 10% wafer price increase in the second half of the year, raising its rating to overweight and its target price by about 65% to HKD 28.

Technical Analysis:  

(Hang Seng Index, 1-day chart) 

Market Trends: 

  • Hang Seng Index: Up 0.54%, to 18,034.42.
  • Hang Seng Tech Index: Up 0.62%, to 3,714.22.
  • Hang Seng China Enterprises Index: Up 0.49%, to 6,390.53.

FTSE China A50 Index

Fundamental Analysis: 

Mainland China’s three major indices had mixed movements in early trading. The Shanghai and Shenzhen indices saw weak consolidation, while the ChiNext index oscillated in positive territory.

Sector-wise, new tech stocks on the STAR Market surged, with multiple stocks hitting the 20% daily limit. Chip and PCB concept stocks remained active, with Harmony Electronics hitting its eighth consecutive limit up.

Apple concept stocks continued to strengthen, with Jemtec, Yitong Communications, and Tianyin Holdings hitting limit up. Robotics stocks rose during trading, with Siling Co. and Boke Co. up more than 10%.

Technical Analysis:  

(SSE Composite Index, 1-day chart) 

Market Trends: 

  • Shanghai Composite Index: Down 0.30%, to 3,028.28.
  • Shenzhen Component Index: Down 0.40%, to 9,233.07.
  • ChiNext Index: Up 0.37%, to 1,786.04.
  • STAR 50 Index: Up 0.79%, to 760.92.

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