Day: 18 July 2024

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Worst day for Nasdaq since 2022 as investors continue to rotate out of tech. S&P 500 slides – Dow gains

Nasdaq pull-back

On Wednesday 17th July 2024, the Nasdaq Composite and S&P 500 pulled-back as investors continued to shift from tech stocks to more interest rate-sensitive sectors.

The S&P 500 dropped 1.39%, closing at 5588. The tech-geared Nasdaq tumbled 2.77%, finishing at 17996, marking its worst session since December 2022 and ending below 18000 for the first time since 1st July 2024.

Conversely, the Dow Jones Industrial Average resisted the downward trend, gaining around 243 points, or to close at 41198. This advance led the index to close above the 41000 milestone.

Nasdaq Composite 17th July 2024 – one day chart

S&P 500 17th July 2024 – one day chart

Dow Jones 17th July 2024 – one day chart

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Pound hits highest level versus dollar for a year

Pound Sterling

The pound reached its highest level against the dollar in a year on Wednesday 17th July 2024, as investors wagered that UK interest rates would remain elevated for longer.

New data released on Wednesday 17th July 2024 indicated that inflation was more persistent than some analysts had anticipated, leading traders to reduce their expectations of a rate decrease in August 2024, propelling the pound above $1.30 for the first time since the previous July.

Additionally, the pound’s strength has been supported by market optimism that the newly elected Labour government will provide economic stability.

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UK inflation holds at Bank of England’s 2% target but above projections

UK inflation

U.K. inflation matched the Bank of England’s target of 2% in June 2024, as calculated by data from the Official for National Statistics on Wednesday 17th July 2024.

The main figure was slightly higher than the 1.9% forecast by analysts surveyed by Reuters, aligning with May’s 2% figure.

Following the announcement, the value of Sterling increased modestly, reaching $1.2977 at 7:21 a.m. British Summer Time.

The Bank of England (BoE) closely monitors services inflation due to its significant role in the U.K. economy and as an indicator of domestic price increases, which remained at 5.7% in June. Service inflation remains a stubborn issue and a problem still for the BoE.

The core inflation rate, which excludes energy, food, alcohol, and tobacco, stood at 3.5%, consistent with the rate seen in May 2024.