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In the lead-up to the U.S. Thanksgiving holiday, Wall Street closed higher on Wednesday, with a rebounding dollar and a focus on economic signals. Here’s a breakdown of the key highlights:
1. Wall Street Performance:
- U.S. stocks saw gains, led by interest rate-sensitive megacaps.
- All three major indexes closed higher, with tech and momentum stocks contributing to the positive momentum.
- Despite light volume, a day-before-Thanksgiving rally reflected an upward bias, echoing the trend throughout the year.
2. Nvidia’s Report:
- Chipmaker Nvidia reported revenue surpassing expectations.
- However, its shares declined by 2.5% due to a cautious outlook on China sales.
3. Economic Data Insights:
- Various economic indicators, including jobless claims, durable goods, and consumer sentiment, suggested a softening economy.
- The economy remains resilient, potentially avoiding a recession.
4. Fed’s Rate Cut Timing:
- Market participants shifted focus to the timing of the Federal Reserve’s first rate cut.
- Debate emerged on when the potential first cut might occur, with the consensus that the Fed has likely halted rate hikes.
5. Global Market Movement:
- European stocks reached a two-month high, and euro zone volatility hit its lowest level since July.
- Emerging market stocks experienced a decline, while the Asia-Pacific region showed mixed results.
6. Dollar Rebound:
- The dollar rebounded from a 2-1/2 month low, influenced by jobless claims data.
- The dollar index rose, with the euro facing a 0.2% decline.
7. Treasury Yields and Rate Cut Expectations:
- Benchmark Treasury yields fluctuated amid robust jobless claims data.
- The market’s expectation of the Fed cutting interest rates as early as June 2024 came under scrutiny.
8. Energy Sector Performance:
- Wall Street’s rally was broad-based, but energy stocks were the sole decliner among the S&P 500 sectors.
- Energy stocks mirrored crude prices, which tumbled earlier due to OPEC+ postponing their meeting on production cuts.
9. Oil Prices and OPEC+ Developments:
- Oil prices initially dropped by as much as 5% after OPEC+ delayed their meeting.
- Crude prices rebounded from the lows, settling above the day’s lowest points.
10. Gold Prices and Dollar Strength:
- Gold prices dipped below $2,000 per ounce, influenced by the dollar’s strength.
The overall market sentiment reflected a mix of optimism, economic scrutiny, and uncertainties surrounding global developments, making it a pre-Thanksgiving session of notable movements.
