US stocks dropped on Thursday, as investors tried to recapture the momentum post-election that drove major indexes up to new record highs.
The Dow Jones Industrial Average fell 165 points or 0.3%. S&P 500 fell by 0.4% and Nasdaq Composite by 0.5%.
After Federal Reserve chairman Jerome Powell said at an event held in Dallas, that the central banks was not rushing to reduce interest rates, it exacerbated the market’s downturn.
Investors debate whether there is any room for a rally after Donald Trump wins the US Presidential election in 2024.
After Trump’s victory last week, all three US equity benchmarks rose to new record highs.
Courtney Garcia is a senior wealth adviser at Payne Capital Management. She told CNBC that:
The rally may not be over in the near future, but I believe there are still many other opportunities that can grow.
Dollar hits 1-year-high on producer prices
On Thursday, the producer price index rose by 0.2% from October. However, the rise is in line with expectations.
The annual increase in the index was 2.4%, which is a bit higher than expected.
The number of jobless claims fell by 4,000, to 217,000 seasonally-adjusted for the week ending November 9. This was lower than expected.
The dollar index increased 0.3% to its highest level in November 2023.
The dollar is up 2.8% since the US election results where Trump was a resounding winner.
Dollar appreciation has put pressure on precious metals such as industrial metals, gold and silver.
Disney Tapestry Surge
Disney shares soared more than 9 percent on Thursday, after its fiscal fourth quarter results exceeded expectations.
Disney’s adjusted revenue was $22.57 billion, which equates to $1.14 per share.
CNBC reports that analysts at LSEG expected earnings per share of $1.10 on revenues of $22.45 Billion.
Tapestry shares also jumped by 8% after it canceled its merger with Capri.
Both luxury clothing brands in the US “mutually” agreed to end their merger plans as it was unlikely that they would receive regulatory approval.
Capri shares fell more than 5% Thursday.
Super Micro plummets
Super Micro shares fell more than 11 percent, continuing the losses of the previous session.
The stock dropped 6% on Wednesday after the company announced that it was delaying the submission of its annual report.
Cisco shares also fell by nearly 3%. The company exceeded Wall Street’s estimates for the quarter and raised its guidance for full year.
The company is on track to have its fourth quarter in a row of falling revenue.
Gold drops to a near 2-month low
The dollar rose on Thursday, causing gold prices to fall to a near two-month low.
The dollar’s strength makes goods priced in greenbacks more expensive to buyers overseas, which limits demand for precious metal.
Market participants also closely followed the remarks of US Fed officials.
Lorie Logan, Dallas Fed president, commented on the report of inflation. She said the US central banks has been working to reduce inflation but that they should be cautious.
St. Louis Fed president Alberto Musalem stated that the risks of higher inflation still remained and that it is difficult for banks to reduce rates any further.
The gold contract at COMEX closed today, February 28, 2010, at $2,577.90 an ounce. This is a 0.3% decrease from its previous closing price.
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