Stocks open on a positive note on the Dow, S&P, and Nasdaq, aiming for further profits.
Market Update: Stocks on a Roll, Dollar Loses Ground
Stocks are poised to build on recent gains, with the S&P 500 eyeing a positive start to the day, erasing its year-to-date losses. The Dow Jones and Nasdaq also showed promising signs, inching upward.
The catalysts behind this rally were primarily the U.S. consumer price index data and a positive outlook on the U.S.-China deal, which propelled stocks higher on Tuesday, May 13. The Dow Jones, which had taken a dip on Tuesday, is also marching forward. The bullish sentiment is also benefiting the Nasdaq, with tech stocks enjoying a boost. Nvidia's strong performance was a significant factor in the tech-heavy index's upward movement.
Wall Street's upbeat open suggests lingering optimism as tariff and inflation concerns quieten down.
However, the DJI saw a dip despite the broader rally, as healthcare stocks took a hit following President Trump's order. Gold prices slid in the wake of the broader market rally, while the US dollar continued its decline for the second day running. The lessening of trade war tensions and easing inflation fears are believed to be the main factors behind the dollar's weakness.
U.S. Treasury yields exhibit a downward trend. The 10-year Treasury yield decrescendoed by 1 basis point to 4.489%, while the 2-year yield fell to 4.013%.
According to Kelsey Berro, a fixed income portfolio manager at JPMorgan Asset Management, the market has adjusted the yield curve's front end. "One of the reasons why yields should remain within a range here, is that while Fed rate cuts have been pushed out, we're still a long way away from thinking about Fed rate hikes," said Berro, in an interview with CNBC.
Aside from the CPI report and the U.S.-China trade truce, investors will keep a close eye on developments from the ongoing earnings season for further insights into market directions.
Meanwhile, UBS reveals that wealthy clients are steering clear of US dollar-based assets and opting for gold and cryptocurrencies instead. This shift is a reaction to escalating geopolitical uncertainty and persistent market volatility. Historically, these investors have been heavily invested in U.S.-centric assets, but they are now looking for broader diversification to hedge against risks associated with traditional US dollar assets.
This trend suggests a growing interest in assets perceived as more stable or less correlated with traditional markets during uncertain times. The adoption of cryptocurrencies by major financial institutions like UBS indicates a growing acceptance of these assets as part of a diversified investment strategy.
- UBS wealthy clients are moving away from U.S. dollar-based assets and investing in gold and cryptocurrencies, like ico and token, as a means to diversify and hedge against risks.
- As the stock-market continues its rally, some investors are increasingly looking at crypto finance, such as dex, as an alternative to traditional markets during uncertain times.
- Despite the strong performance of tech stocks in the stock-market, some investors are turning to cryptocurrencies for their stability and low correlation with traditional markets, like stock-market and gold.
