Wall Street Falls from Record Levels, Inflation Eases

On Wall Street on Thursday, the S&P 500 slipped from record levels, as did the Nasdaq index, as prices of technology company stocks fell following reports of easing inflation in the U.S.

The Dow Jones index strengthened by 0.08 percent, to 39,753 points, while the S&P 500 fell by 0.88 percent, to 5,584 points, and the Nasdaq by 1.95 percent, to 18,283 points.

Thus, the S&P 500 and Nasdaq, after reaching record levels for several consecutive days, slipped from those levels.

The decline in the index followed the announcement that inflation in June in the U.S. eased by 0.1 percent on a monthly basis, bringing the annual inflation rate to 3 percent, its lowest level in over three years.

As a result, speculation strengthened that the U.S. central bank would lower interest rates as early as September.

Despite the easing inflation, the largest technology companies lost value, including Nvidia, Meta Platforms, and Amazon.

The price of Tesla’s stock plummeted by eight percent after Bloomberg reported that Elon Musk postponed the unveiling of Tesla’s robotaxi from August to October.

While the technology sector sharply declined, the stock prices of smaller companies significantly increased.

Thus, the Russell 2000 index, which includes small company stocks and has significantly lagged behind key U.S. stock indices in growth this year, jumped 3.6 percent on Thursday, reaching its highest level in over three months.

Investors expect that with the reduction of interest rates, the business environment for smaller companies will improve.

– I think investors now believe that the Fed is ready to start lowering interest rates. Therefore, they say: ‘That’s good enough for me. I don’t have to wait for them to actually do it,’ says Sam Stovall, a strategist at CFRA Research.

European Markets Rise for the Third Consecutive Day

On European markets on Friday morning, stock prices rose slightly for the third consecutive day, with Swedish Ericsson among the biggest gainers.

The STOXX 600 index of leading European stocks was up 0.3 percent at 9:30 AM, strengthening for the third consecutive day.

Meanwhile, the London FTSE index rose by 0.55 percent, to 8,268 points, while the Frankfurt DAX increased by 0.21 percent, to 18,570 points, and the Paris CAC by 0.53 percent, to 7,667 points.

After a decline at the beginning of the week due to political uncertainty in France following the extraordinary parliamentary elections, European stock indices have been recovering in recent days.

The biggest winner this morning was the telecommunications sector, with a rise of nearly 1 percent, primarily due to an 8 percent jump in Ericsson’s stock price after the Swedish company reported a smaller-than-expected decline in revenue.

Most Asian Markets Follow Wall Street’s Decline

On most Asian markets, stock prices fell. The MSCI Asia-Pacific index, excluding Japan, was down 0.1 percent at 9:30 AM, but is on track for a gain of about 1.5 percent this week.

This morning, the Nikkei index on the Tokyo Stock Exchange plummeted about 2.5 percent, while stock prices in Shanghai and South Korea fell between 0.1 and 1.3 percent. In Australia and Hong Kong, however, they rose between 0.9 and 2.5 percent.

Thus, most markets are following yesterday’s decline on Wall Street. Although the Dow Jones index strengthened by 0.1 percent, the S&P 500 fell by 0.9 percent, and the Nasdaq by 1.95 percent.