Stock markets in the U.S. surge following the Federal Reserve's announcement
In the wake of the Federal Reserve keeping interest rates unchanged, US stock exchanges showcased a positive response on Main Street. The markets seemingly appreciated the central bank's decision, causing US indices to climb. However, Weight Watchers Inc. bore the brunt of a bankruptcy filing, sending the company plummeting.
Trump's reluctance to roll back tariffs on China worth $145 billion momentarily cast a shadow over the session. Despite this, the Fed held firm and kept interest rates unchanged, as anticipated. The announcements of replacing a contentious export regulation for AI chips and the Fed's emphasis on waiting and watching, instead of hurried action, comforted the investors.
The Dow Jones Index, the index of blue-chip stocks, closed sharply up by 0.7% at 41,113 points. Meanwhile, the tech-driven Nasdaq inched 0.3% ahead to 17,738 points, and the broad-based S&P 500 gained a modest 0.4% to 5,631 points. Market analysts predicted that negotiations between the world's two largest economies, the USA and China, slated for this weekend in Switzerland, might hold the key to further market fluctuations.
The Fed chairman emphasized the importance of gaining clarity about the trade conflict's impact on the US economy before considering potential interest rate cuts. Ellen Hazen, of F.L. Putnam Investment Management, pointed out that the Fed's statement emphasized the increased risks of unemployment and inflation, an apparent reference to tariffs.
However, the real fireworks occurred among individual stocks. WW International's shares nosedived 43% following a bankruptcy announcement, with the diet company previously known as Weight Watchers bearing the brunt of the fallout. Meanwhile, Apple's latest plans stirred uncertainty for Alphabet, Google's parent company, as it dipped by 7.3%. A report suggested that Apple might be planning to align its Safari browser more closely with AI-powered search engines.
Coty, a US cosmetics company, too, came under pressure, with its shares slipping 11.6% after a profit warning from the company management. Industry watchers commented that the sudden deterioration came as a surprise, given the rosy outlook provided by the company just recently. On a brighter note, Walt Disney shares surged by 10.8% due to robust revenue and profits in the first quarter. The entertainment giant's streaming services Disney+ and Hulu gained strong subscriber numbers, while both park attendance and spending per guest also increased, defying economic uncertainties.
Source: ntv.de, ino/rts
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- The Federal Reserve's decision to keep interest rates unchanged led to a positive response from US stock exchanges, causing the Dow Jones Index, Nasdaq, and S&P 500 to climb.
- However, the bankruptcy filing by Weight Watchers Inc sent the company's stock plummeting on Wall Street.
- Market analysts predict that negotiations between the US and China, scheduled for the weekend in Switzerland, could hold the key to further market fluctuations.
- The CEO of F.L. Putnam Investment Management, Ellen Hazen, noted that the Fed's statement emphasized the increased risks of unemployment and inflation, which might be a reference to tariffs.
- Individual stocks such as WW International, Alphabet, Coty, and Walt Disney showed varying reactions, with the first three experiencing turbulent times, while the latter surged due to robust revenue and subscriber growth in its streaming services.
