Benchmark Index Nears Record High, Advanced Chip Makers See Growth Amid Monetary Policy Shifts

Summary

  • The primary indices have recently experienced a drop with the benchmark noting its most significant daily loss since the end of September.
  • Regardless, if it can reach a fresh closing high, it will affirm that the benchmark index has continued to thrive in the bull market since the point it bottomed out in the bear market in October 2022.
  • Last week’s unexpected policy change by policymakers now suggests a more restrained outlook for the fiscal policy, prompting yields on the benchmark 10-year U.S. treasury note to fall.
  • Despite criticism from the Federal Reserve officials, traders are anticipating a rate cut as early as March next year.
  • The economic state of the U.S is under focus, following the Fed’s previously rapid fiscal stabilisation moves.
  • Furthermore, Micron Technology has predicted monthly revenues, which exceed market predictions, suggesting a probable recovery of memory chip sales in 2024.
  • US electric vehicle makers, Tesla, Lucid Group, and Nikola, along with other chip makers, have also reportedly seen gains.

Latest Market Updates

Following a recent rally that had almost achieved a record closing high early this year, the central indexes have taken a blow with the benchmark recording its most significant fall since last September.

Interestingly, achieving a new closing high could validate the continuation of the bull market from the bear market’s trough in October 2022.

Trends in Revenue and Expectations

Last week’s surprise dovish twist by policymakers on the financial strategy forecast has pushed yields on the benchmark 10-year U.S. treasury note down from the highs it touched in October to 3.878%.

Notwithstanding the pushback from the Federal Reserve officers, traders are foreseeing at least a rate cut by 25 basis points as early as the next spring. The CME FedWatch Tool indicates a nearly 100% chance of this rate cut by May.

These data points will illuminate the state of the U.S. economy following the Zero Fed’s fastest fiscal tightening in years.

Tech Forecasts and its Implications

Micron Technology’s share have surged by 5.5% due to its revenue forecast exceeding market estimates, indicating a recovery of memory chip sales by 2024.

Other chipmakers like Nvidia and Advanced Micro Devices have potentially witnessed an increase of over 1% each.

Meanwhile, U.S. electric vehicle manufacturers such as Tesla, Nikola, and Lucid Group have seen increases between 1.2% and 4.0%, following reports of a possible tariff increase on Chinese EV makers.

On the contrary, the U.S.-listed shares of BlackBerry have declined by 5.4% following the tech corporation’s Q4 revenue forecast falling short of analysts’ expectations.

The influence of these trends might cause a ripple effect in the forex or trading sector, particularly impacting assets like the U.S. treasury notes and the stocks of tech and electric vehicle firms.

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