US markets resume rally following inflation data

Stocks jumped Tuesday after fresh U.S. inflation data was about in line with expectations, clearing the way for investors to resume buying high-flying tech names such as Nvidia and Meta Platforms.

The Dow Jones Industrial Average gained 235.83 points, or 0.61 per cent, to close at 39,005.49. The S&P 500 ticked up 1.12 per cent to finish the session at 5,175.27, surpassing the previous record high close from March 7. The Nasdaq Composite advanced 1.54 per cent to 16,265.64.

Shares of chipmaker Nvidia climbed more than 7 per cent. Microsoft gained 2.6 per cent, and Meta popped 3.3 per cent. Oracle surged more than 11 per cent after beating Wall Street earnings estimates.

The consumer price index climbed 0.4 per cent in February and 3.2 per cent year over year, the Bureau of Labor Statistics said on Tuesday. Economist polled by Dow Jones expected a 0.4 per cent increase last month and 3.1 per cent year-over-year, respectively. Core inflation, which strips out food and energy from the headline reading, climbed 0.4 per cent in February, compared to a forecast gain of 0.3 per cent.

Investors now turn their attention to the producer price index report due this week and the Fed’s next monetary policy meeting later this month.

In broader market news the Small-cap names bucked Tuesday’s uptrend in the market. The small cap-focused Russell 2000 slid 0.2 per cent in Tuesday’s session. That aligns with the broader trend of underperformance among smaller stocks. The Russell 2000 is up less than 2 per cent in 2024, while the S&P 500 has climbed more than 8 per cent.

The price of gold has surged by 7 per cent in just over a week, reaching record highs of nearly $2,195 per troy ounce, attributed by some analysts to increasing expectations of US interest rate cuts. Despite gold-backed exchange-traded funds experiencing outflows of 21 million ounces over the past year, the nominal high persists, whereas bitcoin has surpassed $72,000 on Monday, buoyed by billions of dollars flowing into ETFs since their US launch two months ago.

In a sign of higher investor activity, the number of outstanding gold futures contracts on Comex has jumped 30 per cent since February 28, while net long positions rose about 64,000 to 208,000 contracts last Tuesday, according to Commodity Futures Trading Commission data.

The current price of lithium carbonate in China has surged to its peak since December after experiencing a staggering drop of over 80 per cent in 2023. This drastic decline has prompted several producers to scale back their output. Core Lithium Ltd. notably halted some mining activities to trim cash expenses, attributing it to the substantial price downturn. According to UBS, the lithium market is undergoing a rebalancing phase as the industry adjusts production and project plans.

Turning to US sectors, Tech was the best performer, closing higher by more than 2.5 per cent. Utilities was the worst performer.

Today's local data includes the release of the CBA Household Spending Insights report alongside the monthly business turnover indicator. Additionally, in Sydney, Ellis Connolly, the Reserve Bank's head of payments policy, is scheduled to speak.

Futures

The SPI futures are pointing to a 0.2 per cent rise.

Currency

One Australian dollar at 8.40am was buying 66.06 US cents.

Figures around the globe

European markets closed higher. London’s FTSE added 1.02 per cent, Frankfurt gained 1.23 per cent, and Paris closed 0.84 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei lost 0.06 per cent, Hong Kong’s Hang Seng gained 3.05 per cent and China’s Shanghai Composite lost 0.41 per cent..

Yesterday, the Australian share market closed 0.11 per cent higher at 7,712.53.

Ex-dividends
Bisalloy Steel (ASX:BIS) is paying 8 cents fully franked
Brambles Limited (ASX:BXB) is paying 23.09 cents 35 per cent franked
Downer EDI Limited (ASX:DOW) is paying 6 cents unfranked
Data#3 Limited (ASX:DTL) is paying 12.6 cents fully franked
Glennon SML Co Ltd (ASX:GC1) is paying 1 cent fully franked
IVE group (ASX:IGL) is paying 9.5 cents fully franked
Imdex Limited (ASX:IMD) is paying 1.5 cents fully franked
Mercury NZ Limited (ASX:MCY) is paying 8.7258 cents unfranked
Peppermoney (ASX:PPM) is paying 5 cents fully franked
Perpetual Limited (ASX:PPT) is paying 65 cents 35 per cent franked
Thorney Opp Ltd (ASX:TOP) is paying 1.05 cents fully franked

Dividends payable
Lendlease Group (ASX:LLC)
Sequoia Financial Group Ltd (ASX:SEQ)
TPC Consolidated Ltd (ASX:TPC)
Reef Casino Trust (ASX:RCT)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

Disclaimer

The views, opinions or recommendations of the commentators in this presentation are solely those of the author and do not in any way reflect the views, opinions, recommendations, of Sequoia Financial Group Limited ABN 90 091 744 884 and its related bodies corporate (“SEQ”). SEQ makes no representation or warranty with respect to the accuracy, completeness or currency of the content. Any prices published are accurate subject to the time of filming and shouldn’t be relied upon to make a financial decision. Commentators may hold positions in stocks mentioned and companies may pay FNN to produce the content at times. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian Financial Services Licensee before making investment decisions. To the extent permitted by law, SEQ excludes all liability for any loss or damage arising in any way including by way of negligence.
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