US Stock Markets Mixed Following Trump's Gulf Visit, AI Stocks Shine
AI stocks climb following Trump's visit to Saudi Arabia
Wall Street took a breather in the middle of the week, after a couple of days of mixed performances. The Dow Jones closed 0.2% lower at 42,051 points, while the S&P-500 rose by 0.1%, and the Nasdaq Composite advanced by 0.7%.
The ongoing trade conflict between the USA and China continued to dominate the scene, even if there are signs of relaxation since the weekend. However, no talks regarding future tariffs have begun yet. With the originally high tariffs set to return after 90 days, there is a time crunch, as stated.
Cisco's third-quarter results were awaited by investors, to be announced after the closing bell. "Cisco's Q3 results are eagerly anticipated given positive indications of robust demand in the data center and enterprise technology sectors, a reasonable dividend policy, and potential margin impacts due to tariffs," said the analysts at Vital Knowledge. Cisco stock took a 0.8% dip before the numbers were released.
AI-focused stocks were in demand, following Saudi Arabia's announcement of a $20 billion investment in AI data centers and energy infrastructure from the USA the previous day. Nvidia (+4.2%) and AMD (+4.7%) were propelled by a partnership with Saudi Arabian Huma, a subsidiary of the sovereign wealth fund. AMD also announced a further share buyback, and Super Micro Computer surged 15.7%. The server manufacturer has entered into a partnership with Saudi Arabian Datavolt.
Apple stock experienced a slight decrease. Foxconn reported significant Q1 profits but lowered its sales forecast due to tariff risks. The world's largest electronic product contract manufacturer, known for producing Apple's iPhones, saw an increase in profits partly due to customers rushing deliveries to the USA ahead of US import tariffs, and their growing presence in AI server manufacturing for US tech companies like Amazon and Nvidia.
Boeing (+0.7%) and GE Aerospace (+0.7%) were boosted by $96 billion worth of orders from Qatar for aircrafts and engines, as announced by the White House.
American Eagle Outfitters reported disappointing preliminary results for Q1 and withdrew its FY '25 forecast. The stock dropped by 6.5%.
Oil prices retreated after recent gains. Brent and WTI prices fell by up to 1.3%, as unexpected rises in US oil inventories were reported. Oil prices had risen, supported by the easing of tensions between the US and China. "A downturn in market sentiment towards trade talks could disrupt the recent rally," said analyst Callum Macpherson of Investec.
Gold prices plummeted. The troy ounce dropped 2.1% to $3,181, due to reduced demand for safe havens. Bond market yields decreased. The yield on 10-year notes rose by 4 basis points to 4.54%. According to Mark Capleton of Bank of America, rising yields could be expected as foreign investors lose enthusiasm for financing the US deficit, leading to lower demand for US bonds.
Check out more on today's stock market here.
Source: ntv.de, ino/rts
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In light of the ongoing trade tensions between the USA and China, it might be prudent for European Central countries to review and potentially reconsider their employment policy, focusing on attracting foreign investments, such as finance and investing in the stock-market, to create job opportunities and foster economic growth. The recent surge in AI-focused stocks, such as Nvidia and AMD, could serve as an example for potential areas of investment, further emphasizing the importance of a flexible and attractive employment policy.
