Investor sentiment continues to improve after last week’s slide, but uncertainty persists
After a bearish week, US stocks rose on Monday, with tech shares leading the gains. Last week, tech stocks gave up more than 4% to attract dip buyers at the start of the week. The Nasdaq Composite posted its worst weekly performance since September, losing 3.25%. Overnight, Nvidia rallied nearly 6.5%, reaching an all-time high, and Amazon gained more than 2.6%. The S&P 500 added 1.41%, the Nasdaq Composite jumped 2.2%, and the Dow Jones advanced 0.58%.
Mirroring recovery on Wall Street, Asian stocks advanced on Tuesday as investor sentiment continued to improve after last week’s slide triggered by uncertainty about the likelihood of near-term interest rate cuts. Hong Kong’s Hang Seng added nearly 0.3% while China’s Shanghai Composite index rose 0.2% to regain some ground lost earlier. Tokyo’s Nikkei 225 index gained 1.2%, after the market reopened from a holiday. Now, investors look ahead to reports on US consumer and producer price inflation due later this week.
Bucking the trend, European stocks gave up pre-market gains to open lower today. The Stoxx 600 index was 0.3% lower in early deals, with most of sectors turning red. On the data front, German industrial production fell 0.7% in November compared to the previous month, from an upwardly revised 0.3% decline in the previous month. The contraction marks the sixth monthly decline in a row. US stock index futures are slightly down in early pre-market deals, which is weighing on the overall mood.
Meanwhile, the US dollar turned slightly higher after yesterday’s dip to the 102.00 zone that capped the selling pressure. The USD index has bounced slightly since then, staying below the 102.50 immediate resistance as the buying momentum looks limited ahead of the mentioned US economic data that will set fresh direction for the greenback. While the overall tone surrounding the dollar looks neutral at this stage, the euro still struggles to regain the ascending 20-DMA, also staying below the 1.10 mark these days.
