Stocks Rise as Fed Indicates Possible Hold on Interest Rates
Stocks showed a steady upward trend on Friday, with the Nasdaq recovering from a recent slump fueled by Apple (AAPL) shares. This positive movement came after officials hinted that the Federal Reserve may delay hiking interest rates at its upcoming meeting in September.
The S&P 500 (^GSPC) saw a gain of about 0.2%, while the Dow Jones Industrial Average (^DJI) rose by 0.1%. The Nasdaq Composite (^IXIC) also saw an increase of around 0.2% as Apple’s shares recovered, providing a boost to the tech sector.
Investors are carefully considering the comments made by several Fed policymakers that suggest a possible pause in further rate hikes this year. This optimism was strengthened by Federal Reserve Bank of New York President John Williams’ statement on Thursday, stating that US monetary policy is currently in a favorable position. However, Williams also emphasized that the decisions would ultimately be guided by economic data.
The Fed’s decision on whether to maintain higher interest rates for a longer period of time is heavily influenced by inflation data. Concerns are growing over rising energy prices and the potential impact on price pressures. On Friday, the strike at Chevron’s natural gas plants in Australia, which account for over 5% of global LNG supply, led to a surge in European gas futures (NG=F). This is in addition to recent increases in oil prices (CL=F), intensifying worries in the market.
Apple’s shares experienced a significant downturn this week due to reports of Chinese restrictions on the use of iPhones by government officials and within state companies. This decline resulted in a market value loss of nearly $200 billion for the tech giant. The slide caused anxiety in the market, especially among Apple’s suppliers in Asia. However, the stock showed a modest increase of just over 1% in early Friday trading.
Despite the upcoming launch of Apple’s next iPhone model, some analysts have become less optimistic about the company’s stock, suggesting that its decline may not be over yet. Meanwhile, Samsung is positioning its new Galaxy foldable smartphones as strong competitors to capture market share from the iPhone.
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