The US stock market had a mixed performance this week, with the S&P 500, Dow Jones, and Nasdaq recording their third straight weekly gain, but ending a five-session streak of record highs on Friday. Despite this, optimism about the economy and lower interest rates, as well as bets on artificial intelligence, continue to drive the market.
One of the key factors impacting the market was a bleak revenue forecast from Intel, which caused the company’s stock to tumble 11.9% to a six-week low. Intel’s struggles in the AI race and a weak PC market were cited as reasons for the disappointing forecast. Another company that faced challenges was chip manufacturing tools maker KLA Corp, whose third-quarter revenue forecast fell short of expectations, causing its stock to drop 6.6%.
On a positive note, the US Commerce Department reported moderate growth in the personal consumption expenditure index, which is the Federal Reserve’s preferred inflation gauge. This kept the annual increase in inflation below 3% for a third-straight month and bolstered the case for rate cuts this year.
Despite the mixed performance, the majority of S&P 500 companies that have reported earnings so far surpassed expectations. According to LSEG data, 78.2% of these companies exceeded expectations, compared to a long-term average beat rate of 67%.
Looking ahead, investors will be closely watching for quarterly reports from companies like Apple, as well as monitoring the impact of global events such as the AI race and the overall health of the global economy. The US stock market remains in a period of uncertainty, with various factors influencing its performance in the coming weeks.
Frequently Asked Questions:
1. What was the performance of the US stock market this week?
The US stock market had a mixed performance this week, with the S&P 500, Dow Jones, and Nasdaq recording their third straight weekly gain, but ending a five-session streak of record highs on Friday.
2. What caused Intel’s stock to tumble?
A bleak revenue forecast from Intel caused the company’s stock to tumble 11.9% to a six-week low. The struggles in the AI race and a weak PC market were cited as reasons for the disappointing forecast.
3. Which company faced challenges with their revenue forecast?
Chip manufacturing tools maker KLA Corp faced challenges with their third-quarter revenue forecast falling short of expectations, causing its stock to drop 6.6%.
4. What positive news impacted the market?
The US Commerce Department reported moderate growth in the personal consumption expenditure index, which is the Federal Reserve’s preferred inflation gauge. This kept the annual increase in inflation below 3% for a third-straight month, which bolstered the case for rate cuts this year.
5. How many S&P 500 companies exceeded expectations in their earnings reports?
According to LSEG data, 78.2% of S&P 500 companies that have reported earnings so far surpassed expectations, compared to a long-term average beat rate of 67%.
6. What should investors watch for in the coming weeks?
Investors should closely watch for quarterly reports from companies like Apple, as well as monitor the impact of global events such as the AI race and the overall health of the global economy. The US stock market remains uncertain, with various factors influencing its performance.
Key Terms/Jargon:
– S&P 500: A stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States.
– Dow Jones: A stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States.
– Nasdaq: A stock market index that measures the stock performance of technology and growth companies listed on the Nasdaq stock exchange.
– Revenue forecast: An estimation or prediction of a company’s future revenue based on various factors and assumptions.
– Artificial intelligence (AI): The simulation of human intelligence processes by machines, especially computer systems.
– Inflation: The rate at which the general level of prices for goods and services is rising and, subsequently, the purchasing power of currency is falling.
– Rate cuts: Reductions in interest rates by central banks to stimulate economic growth by making borrowing cheaper.
Suggested Related Links:
– Apple: Official website of Apple Inc.
– US Department of Commerce: Official website of the US Department of Commerce.
– Federal Reserve: Official website of the Federal Reserve System.