Global stock markets experienced a significant recovery on Thursday, rebounding sharply after substantial losses recorded the previous day. The major indices—including the tech-heavy Nasdaq Composite, the S&P 500 benchmark, and the Dow Jones Industrial Average—all posted gains, signaling a market bounce following recent volatility.
Market Performance and Index Movements
Following declines of between 1.5% and 2.2% on Wednesday, the major indexes rebounded robustly on Thursday. Specifically, the Nasdaq Composite gained 2.8%, the S&P 500 increased by 1.7%, and the Dow Jones Industrial Average closed up 1.2%, adding 600 points.
Despite the overall gains, sector performance was uneven across the S&P 500, with a majority of sectors showing negative movement. Information Technology shares were the primary driver of the market rally, climbing an impressive 5.1%. However, sectors like Communication Services (down 2.6%) and Consumer Staples (down 2.2%) dragged down other areas.
Economic Data and Federal Reserve Commentary
The rebound occurred against a backdrop of key economic data released on Thursday morning. The Personal Consumption Expenditures (PCE) inflation reading, which is the Federal Reserve’s preferred gauge, indicated that prices had risen 3.7% over the past twelve months in June, marking a decline from the 4.1% annual increase seen in May. Furthermore, the “core” PCE—which excludes volatile food and energy costs—rose by 3.3% annually in June, down slightly from 3.4% the previous month.
Other economic indicators provided mixed signals: second-quarter GDP growth registered at 1.5%, falling below the expected rate of 1.8%; first-quarter growth had been recorded at 2.1%. At the close of business on Thursday, the 10-year Treasury yield was reported below 4.67% at 4 p.m. ET, lower than Wednesday’s closing level above 4.68%.
“These data confirm what we already knew—but for the energy shock, inflation would be heading lower,” stated Jamie Cox, Managing Partner for Harris Financial Group. “The Fed made the right call yesterday to stand pat on rates.”
Earlier in the week, after the Federal Reserve decided to maintain current interest rates following a 9-3 vote, and with Chairman Kevin Warsh emphasizing the central bank’s commitment to reducing inflation to its 2% target, traders were pricing in changes. According to the CME Group’s FedWatch tool, the probability of at least a quarter-percentage-point rate hike at the September meeting dropped to 63%, down from 82% one week prior.
Corporate Earnings and Technology Sector Movers
Earnings reports provided significant momentum. Yesterday, Microsoft (MSFT) announced results that surpassed analyst predictions, causing its stock to surge by 16% and leading the Dow Jones Industrial Average. Conversely, Meta Platforms (META) saw its shares drop 8% after reporting profit figures below expectations due to escalating costs.
Attention remains focused on technology stocks; Apple (AAPL) and Amazon (AMZN) were scheduled to release their quarterly results later in the day, with Apple slipping about 1.5% while Amazon increased by 4%. The performance of key semiconductor and memory sectors was also notable. Both the Roundhill Memory ETF (DRAM) and the broader iShares Semiconductor ETF (SOXX) jumped significantly, rising 16% and 8.5%, respectively, after falling over 6% and 5% on Wednesday.
Commodities and Global Assets
Global commodity prices experienced fluctuations influenced by geopolitical events. Oil prices declined on Thursday as traders evaluated U.S. forces’ retaliatory actions against Iran. West Texas Intermediate (WTI) futures, the U.S. benchmark, were 1.1% lower at $83.50 a barrel in recent trading. Meanwhile, global benchmark Brent crude futures saw a decline of 2%, falling just below $89.
Other assets also showed distinct movements: Gold futures climbed by 3.4%, reaching $4,170 an ounce. Bitcoin traded around $64,800, recovering from overnight lows near $63,200. The U.S. dollar index, which tracks the value of the greenback against a basket of foreign currencies, weakened slightly, falling nearly 1% to 99.94.
