Wall Street Vibes: Coinbase Soars in S&P 500, Tech Values Remain High
Skyrocketing Technology Valuations Persist
The good vibes on Wall Street persist following the initial stock frenzy at the beginning of the week. Except for the Dow, all is booming, thanks to the resurgence of UnitedHealth's stock. US investors are diving headfirst back into the gold market.
The recent US inflation report is fuelling gains in tech-dominated US indices. The Nasdaq closed Tuesday with a 1.6% boost, landing at 19,010 points. The S&P 500 climbed 0.7%, reaching 5,886 points. The Dow Jones Industrial Average, however, dipped 0.6%, settling at 42,140 points, mostly due to the UnitedHealth slump.
Surprisingly, US inflation cooled down in April, a month marked by President Donald Trump's tariff announcements. The inflation rate came down to 2.3%, from 2.4% in March. Economists anticipated 2.4%. According to Mike Reynolds, chief strategist at Glenmede, "We aren't seeing any substantial impacts from the tariffs yet; it's too soon. What we are seeing is that inflation has been quite stable so far."
The Dollar Index dropped 0.8% to 100.967 points, after gaining more than 1% at the start of the week. The easing tensions between the US and China following weeks of confrontation have alleviated fears of a downturn. Rodrigo Catril, currency strategist at National Australia Bank, stated, "The trade deal was better than the market expected, indicating that the US government is very sensitive to the economic impacts of the tariffs."
Tech-savvy investors are leveraging the recent price drop to jump back into the gold market. Gold climbed half a percent to $3,248 per troy ounce, after falling 3.5% the previous day. Bart Melek, chief strategist at TD Securities, observed, "There was a significant correction in the gold price on Monday following the US-China agreement announcement. However, the tariffs on Chinese goods remain at 30%, negatively impacting the economy."
Coinbase Takes Off in S&P 500
Coinbase made headlines in the stock world, soaring nearly 24% on individual stocks. The largest cryptocurrency exchange will displace credit card issuer Discover Financial in the S&P 500 on May 19. Coinbase becomes the first company from the crypto sector to be accommodated in the index.
On top of that, Nike and Nvidia also had a fantastic day. The running shoes' popularity, backed by Swiss tennis star Roger Federer, is lifting board spirits, despite US trade policies. Investors also showed preference for Nvidia, as it announced a partnership with Saudi Arabia's AI startup, Humain. Nvidia stocks rose 5.6% following the news.
However, UnitedHealth's stocks took a hit, plummeting nearly 18%. Andrew Witty, CEO of UnitedHealth, is stepping down for personal reasons, and the company has suspended its 2025 forecast. Hertz also suffered a sharp decline after delivering underwhelming quarterly results, nose-diving nearly 17%.
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Sources: ntv.de, ino/rts
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- The community policy regarding investor preferences may need to account for the recent surge in Coinbase's employment, as the cryptocurrency exchange joins the tech-heavy S&P 500.
- As technology continues to drive market growth, financing strategies should consider the potential impact on employment policies given the recent rise in tech-related companies, such as Nvidia, and the entry of Coinbase into the S&P 500.
