US Stocks Finish Higher Despite AI Trade Exhaustion
Despite signs of exhaustion in the artificial intelligence trade, US stocks finished the week higher, with the Dow Jones leading the way with a 1.5% gain. The S&P 500 and Nasdaq 100 also saw modest gains of about 0.5%.
The week saw some turbulence in the AI sector, with Nvidia stock taking a breather and other hot-AI stocks like Broadcom, Dell, and Super Micro Computer also experiencing declines in Friday’s trading session.
Investors are closely monitoring economic data, with some economists calling on the Federal Reserve to cut interest rates in July as the risk of a recession grows. While the likelihood of a July interest rate cut is currently low, one economist sees the odds closer to 60%.
Economist Claudia Sahm expressed concern about the Fed’s reluctance to cut rates, warning that they are “playing with fire” by keeping rates higher for longer. She emphasized the need to prevent a potential economic recession as inflation continues to fall.
In commodities, bonds, and crypto, West Texas Intermediate crude oil and Brent crude both saw declines, while gold also dropped. The 10-year Treasury yield remained flat, and Bitcoin experienced a slight decrease.
Overall, the week ended on a positive note for US stocks, despite challenges in the AI trade and growing concerns about the economy. Investors will be keeping a close eye on upcoming economic indicators and any potential actions by the Federal Reserve to address the risks of a recession.
