The New York Stock Exchange closed down on Tuesday, May 12, pulled down by a slump in the technology sector and a lack of positive news related to inflation and geopolitical events.
Wall Street ended higher, welcoming company results. Wall Street advanced, driven by the prospect of US-Iran negotiations. Wall Street chose to tread cautiously.
The Nasdaq index, heavily focused on technology, fell by 0.71%, while the broader S&P 500 index slid by 0.16%. Only the Dow Jones managed to stay in positive territory, gaining 0.11%.
Chip specialists, particularly in the artificial intelligence sector that fueled the market in recent weeks, had a rough day. Micron dropped by 3.61%, Intel plummeted by 6.82%, Broadcom slipped by 2.13%, and Qualcomm saw a significant drop of 11.46%.
According to David Morrison from Trade Nation, this decline may be due to a slight profit-taking movement following their remarkable surge since the end of March. Despite substantial fluctuations, the market remains calm, says Mabrouk Chetouane, head of market strategy at Natixis IM.
Investors were not overly concerned about a rise in oil prices amidst the diplomatic deadlock between the US and Iran. The market conditions viewed geopolitical risks as short-term events with little lasting impact on asset values, according to Dave Grecsek from Aspiriant.
Investors also had to contend with a new surge in US inflation (CPI index), which reached 3.8% year-on-year in April, the highest in over three years, as per official data released on May 12.
Grecsek stated that the market was prepared for higher inflation, evident from the surge in energy prices. Meanwhile, the yield on the US 10-year Treasury bonds was volatile, hovering around 4.46% by 8:20 pm GMT, up from 4.41% at the close on May 11.
Elsewhere, online marketplace eBay (+2.10% at $110.40) was in demand after its board rejected an unsolicited acquisition offer from video game retailer GameStop (-3.45% at $22.37), deeming it neither “credible” nor “attractive.”
GameStop surprised the markets on May 4 by proposing to acquire the pioneer online auction site for around $55.5 billion. Fast-food chain Wendy’s saw a significant surge (+16.86% at $7.90), fueled by reports from the Financial Times suggesting that the company could go private.
(AFP/VNA/CVN)
