On Wall Street, Records Set, European Markets Decline

On Wall Street, the Dow Jones index weakened by 0.2 percent last week, to 45,544 points, while the S&P 500 strengthened by 0.2 percent, to 6,460 points. The Nasdaq, on the other hand, slid by 0.2 percent, to 21,455 points.

Investor focus last week was on the quarterly business results of Nvidia. Although the revenues and earnings of the world’s largest company by market capitalization were slightly better than expected, Nvidia’s stock price fell slightly after the results were announced.

However, messages from the world’s largest producer of artificial intelligence chips regarding strong demand supported the stocks of companies related to artificial intelligence development.

As a result, the stock prices of tech giants such as Alphabet, Amazon, and Broadcom rose. Additionally, mid-week, the indices reached record levels. However, by the end of the week, they slipped from those levels.

Investor focus was also on new inflation data in the U.S., which showed that inflation reached 2.9 percent in July, the highest level since February. It is evident that the introduction of tariffs is driving up the prices of imported goods, so inflation could remain elevated in the coming months.

On the other hand, as a series of recent data shows that the labor market is weakening, investors believe that the U.S. central bank will reduce interest rates by 0.25 percentage points at the meeting on September 17. However, by then, a report on employment in the U.S. for August will be released, which could affect expectations regarding interest rates.

– The Fed has opened the door for interest rate cuts, but how wide the door is will depend on whether the weakness in the labor market poses a greater risk of rising inflation. For now, it seems that the Fed is closer to a decision on rate cuts – explains Ellen Zentner, a strategist at Morgan Stanley Wealth Management.

Meanwhile, European stock prices fell last week, primarily due to the political crisis in France, where the minority government is trying to push through significant budget cuts.

The London FTSE index weakened by 1.4 percent, to 9,187 points, while the Frankfurt DAX plunged by 1.9 percent, to 23,902 points, and the Paris CAC by 3.3 percent, to 7,703 points.

The dollar index, which shows the value of the U.S. dollar against six major world currencies, strengthened by 0.10 percent last week, to 97.85 points. Meanwhile, the euro exchange rate weakened by 0.3 percent, to 1.1685 dollars.

The U.S. currency also strengthened against the Japanese yen by 0.1 percent, reaching a price of 147.05 yen. The exchange rates of the major currencies did not fluctuate significantly last week as there were no news that would significantly impact expectations regarding interest rates in the U.S.