*The three major stock indexes rose, with the S&P 500 index up 1.6%;
*Medium - and long-term US Treasury bonds weaken, with the benchmark 10-year US Treasury bond approaching 4.10%;
*Meta's performance exceeded expectations, with a post market increase of over 3%.
On Wednesday, the US stock market rose across the board. AMD's financial report has helped the chip sector rebound strongly, and the Federal Reserve has kept interest rates unchanged, confirming progress in inflation. As of the close, the Dow Jones Industrial Average rose 99.46 points, or 0.24%, to 40842.79 points, the Nasdaq rose 2.64%, or 17599.40 points, and the S&P 500 index rose 1.58%, or 5522.30 points, marking the largest increase in nearly half a year.
Market Overview
The Federal Reserve announced its interest rate decision, stating that further progress has been made in reducing the inflation rate to near the target of 2% in recent months. Federal Reserve Chairman Powell stated at a subsequent press conference that if the data continues to lead people to believe that inflation is slowing down, they may be prepared to take action.
The yield of medium and long-term US Treasury bonds has significantly decreased by nearly 10 basis points, with the 2-year Treasury bond closely related to interest rate expectations dropping to 4.337% and the benchmark 10-year Treasury bond falling to 4.107%. LPL Chief Economist Jeffrey Roach stated in a report, "The Federal Reserve is using today's statement to prepare for the upcoming rate cut. As inflation improves and unemployment rises, the Fed can cut rates, and the market may respond positively to the subtle shift in tone
In terms of individual stocks, AMD rose more than 10%, and the company raised its forecast for artificial intelligence chip sales this year, driving the Philadelphia Semiconductor Index to soar 6.7%.
Nvidia rose 12.8%, with a market value rebound of $329 billion, setting a daily record for the US stock market and recovering most of the losses lost this month. Morgan Stanley has released a research report stating that considering Nvidia's recent market sell-off, it is believed to provide a good entry opportunity for interested investors, and therefore has been reclassified as a preferred stock.
Microsoft fell 1.1%, despite slowing growth in its cloud business, as the company plans to invest more funds in building its artificial intelligence infrastructure this fiscal year.
Meta rose 6.8% after the market closed. The company announced its performance after hours, with Q2 revenue increasing by 22% to $39.1 billion, and market expectations for $38.3 billion. The expected revenue for the third quarter is between $38.5 billion and $41 billion, with the median slightly higher than analysts' estimate of $39.1 billion. Costs increased by 7% in the second quarter, but its revenue significantly exceeded expenditure growth, resulting in an increase in operating profit margin from 29% to 38%. The daily active population (DAP) of households increased by 7% year-on-year, averaging 3.27 billion.
The social media giant also stated that it will continue to invest heavily in artificial intelligence infrastructure, with capital expenditures expected to be between $37 billion and $40 billion in 2024, an increase of $2 billion from the lower end of the previously predicted $35 billion range. The company has kept its total expenditure forecast for this year unchanged at $96 billion to $99 billion, while warning that infrastructure costs will continue to be a "significant driving force" for expenditure growth in 2025.
Mastercard rose 3.6%, and the payment giant's second quarter profit increased by 17%.
Marriott International fell 4.8% as the hotel giant lowered its guidance for full year earnings and global single room revenue after second quarter sales fell below market expectations.
In terms of economic data, the employment survey released by ADP showed that 122000 new jobs were added in July, which fell short of market expectations and is another sign of a cooling labor market. ADP Chief Economist Nela Richardson said, "As wage growth slows down, the labor market is cooperating with the Federal Reserve's efforts to slow inflation
The Chicago PMI fell to 45.3 points in July, further entering a contraction zone. This index is the last regional manufacturing index before the release of June ISM data on Thursday. Institutions generally expect that, combined with data from other regions, the ISM manufacturing PMI in June may further face downward pressure.
The decline in US crude oil inventories and the rise in geopolitical risks in the Middle East have pushed up oil prices. WTI crude oil contracts rose 4.26% to $77.71 per barrel in the near month, while Brent crude oil contracts rose 2.66% to $80.72 per barrel in the near month.
International gold prices have been boosted by expectations of interest rate cuts and geopolitical risks. COMEX gold futures for August delivery on the New York Mercantile Exchange rose 0.89% to $2426.50 per ounce.