Wall Street Strengthens, Investors Cautious Ahead of Nvidia Results

On Wall Street, stock prices rose on Tuesday, despite a new blow from U.S. President Donald Trump against the independence of the American central bank. The Dow Jones increased by 0.30 percent, to 45,418 points, while the S&P 500 rose by 0.41 percent, to 6,465 points, and the Nasdaq index by 0.44 percent, to 21,544 points.

Investors were focused on Trump’s message yesterday that he is dismissing Fed Governor Lisa Cook because, he claims, she improperly obtained at least one mortgage loan for real estate purchases. Cook, on the other hand, stated that she will not resign, that she has done nothing illegal, and that Trump does not have the authority to dismiss her.

The U.S. President cannot legally dismiss members of the Fed’s board as it would undermine the independence of the central bank. However, the law allows for the removal of Fed leaders if there is a legal reason for it.

Trump has long been criticizing Fed Chairman Jerome Powell and urging him to lower interest rates, so his latest move is seen as a new attack on the independence of the central bank and its credibility.

As a result, the market was under pressure at the beginning of yesterday’s trading. However, it later recovered.

– We are all very concerned about the independence of the central bank, but in the long term. In the short term, this changes nothing; a Fed rate cut is still expected in the upcoming period – explains Bill Merz, director at Capital Market Research.

The rise in the index is attributed, among other things, to the increase in Nvidia’s stock price by more than one percent ahead of the release of the quarterly business report from the world’s largest company by market value.

The world’s largest manufacturer of artificial intelligence chips will release its report on Wednesday, and its results are likely to significantly influence the direction of stock prices in the technology sector, as well as across the entire market.

The dollar slightly increased

Meanwhile, European stock prices fell yesterday. The London FTSE index slid by 0.60 percent, to 9,265 points, while the Frankfurt DAX fell by 0.50 percent, to 24,152 points, and the Paris CAC by 1.70 percent, to 7,709 points. The STOXX 600 index of leading European stocks was up 0.2 percent at 9:30 AM, following a significant drop yesterday.

At the same time, the London FTSE index strengthened by 0.31 percent, to 9,294 points, while the Frankfurt DAX rose by 0.02 percent, to 24,156 points, and the Paris CAC by 0.27 percent, to 7,230 points. Yesterday, the indices significantly fell due to the political crisis in France, where the minority government is trying to push through unpopular budget cuts, which could lead to a loss of parliamentary confidence. This morning, the markets stabilized, but trading remains cautious.

Asian markets are trading cautiously on Wednesday. The MSCI Asia-Pacific index was up 0.2 percent at 7:00 AM, recovering some of yesterday’s losses. Stock prices in Hong Kong, South Korea, Australia, Japan, and Shanghai rose between 0.1 and 0.3 percent.

In the currency markets, the value of the dollar against a basket of currencies slightly increased. The dollar index, which shows the value of the U.S. dollar against the other six major world currencies, is around 98.44 points this morning, compared to 98.36 points at the same time yesterday. Meanwhile, the price of the euro slipped from yesterday’s 1.1630 to 1.1610 dollars.

The American currency also strengthened against the Japanese yen, with the dollar exchange rate reaching 147.90 yen, compared to 147.75 yen at the same time yesterday. Oil prices, on the other hand, are stagnating after a significant drop yesterday. In the London market, the price of a barrel increased by 0.06 percent, to 67.25 dollars, while in the U.S. market, a barrel rose by 0.05 percent, to 63.30 dollars.