US Stock Markets Show Mixed Results, Focus Shifts from China Trade Dispute to Trump's Saudi Arabia Investments
AI's stocks surge following Trump's visit to Saudi Arabia
Stock markets in the US are experiencing a shift in momentum, with traders now looking past the China trade dispute and focusing on the potential impacts of President Trump's recent visit to the Gulf region. The Dow Jones Index closed slightly in the red, while the S&P-500 and Nasdaq Composite managed to see minor gains.
The ongoing trade conflict between US and China remains a significant factor, despite some signs of easing since the weekend. Concrete negotiations on future tariffs have yet to begin, creating a sense of urgency due to the impending return of originally high tariffs in 90 days.
Among the individual stocks, investors kept a keen eye on results from Cisco for the third quarter. Despite optimistic sentiment due to healthy demand in data center and enterprise technology areas, some margin impacts from tariffs are expected. Cisco stock took a dip before the announcement of the figures.
On a more positive note, KI-related stocks saw an uptick after Saudi Arabia announced $20 billion in investments in KI data centers and energy infrastructure from the US. Notable winners included Nvidia (+4.2%) and AMD (+4.7%), benefiting from a partnership with the Saudi Arabian Humain. AMD also announced plans for a share buyback. Super Micro Computer jumped 15.7 percent following a partnership with the Saudi Arabian Datavolt.
Apple stock slightly softened, as Foxconn had reported a significant increase in profits in the first quarter but lowered its sales forecast due to tariff risks. The news was a double-edged sword, as Foxconn's role in building KI servers for tech companies like Amazon and Nvidia added to the mix.
Meanwhile, both Boeing and GE Aerospace benefited from an order from Qatar, worth $96 billion in combined aircraft and engine sales.
American Eagle Outfitters faced setbacks, as it reported disappointing preliminary results for the first quarter and withdrew its forecast for the business year 2025, causing the stock to plummet by 6.5 percent.
Oil Prices Hold Steady, Dollar Remains Under Pressure
The dollar stabilized after a downturn but continues to buckle under pressure following President Trump's calls for interest rate cuts and persistent criticism of Federal Reserve Chair Jerome Powell. The greenback's decline after the latest inflation data suggests either faster rate cuts or Trump's satisfaction with the lack of tariff impact in the data.
Oil prices eased after recent gains, as unexpected rises in US oil inventories dampened the rally. Any deterioration in market sentiment towards trade talks could challenge the recent upswing, according to analysts.
The gold price dropped sharply, with lower demand for safe havens leading to a 2.1 percent fall to $3,181 per troy ounce. On the bond market, yields decreased, with the yield on 10-year notes falling 4 basis points to 4.54 percent. Analysts expect yields to continue rising as foreign investors become less willing to finance the US deficit.
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Sources: ntv.de, ino/rts
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Overview:- US stock markets have seen mixed results, with the S&P 500 moving into positive territory for the year. The tech-centric Nasdaq, driven by strong performances from Nvidia and AMD, has risen consecutively as well.- The US stock market trades at an 8% discount to fair value, presenting attractive opportunities for investors.
Company-Specific Updates:- Cisco: Optimism is high for Cisco due to healthy demand in data center and enterprise technology areas. Analysts expect some margin impacts from tariffs.- Nvidia: Nvidia has been a key driver in the Nasdaq's recent gains, contributing to its sixth consecutive day of upward momentum.- AMD: Like Nvidia, AMD has also experienced strong gains in the past week, leading the Nasdaq's upward trend.- Apple: There is no specific mention of Apple's recent performance in the enrichment data.- Boeing: No updates on Boeing are available in the enrichment data.- GE Aerospace: No specific mentions are found in the enrichment data regarding GE Aerospace.- American Eagle Outfitters: American Eagle Outfitters faces challenges, particularly with its Aerie brand, due to soft sales in certain apparel categories and increased production costs.
- The ongoing trade conflict between US and China continues to exert significant influence on stock markets, with investors keeping a close watch on margin impacts from tariffs on companies like Cisco.
- The recent visit of President Trump to the Gulf region has sparked a shift in focus, as investors respond positively to Saudi Arabia's planned investments in KI data centers and energy infrastructure, leading to gains in stocks like Nvidia and AMD.
