Home Business News Dow Jones surges while Nasdaq declines by 2%

Dow Jones surges while Nasdaq declines by 2%

by LLB Finance Reporter
21st Jul 23 10:04 am

The US stock markets continued to exhibit contrasting trends this week as quarterly earnings reports of various companies revealed significant declines.

However, these downturns did not deter the formidable ascent of the Dow Jones Industrial Average, which extended its winning streak for the ninth consecutive day.

Disappointing reports from Tesla and Netflix hurt the Nasdaq Index, causing it to drop by 2%. Netflix, in particular, incurred losses of 8% on Thursday due to lower-than-expected revenue figures.

Similarly, Tesla’s stock plummeted nearly 10% on the same day, following statements from its CEO, Elon Musk, who revealed a slowdown in the company’s production during the current quarter due to certain updates being made in its factories.

Rania Gule Market Analyst at XS.com said, “Moreover, Musk hinted at possible price reductions for its electric vehicles in an attempt to boost demand amidst intensifying competition in the automotive industry, potentially exerting further pressure on the company’s quarterly profit margins.

“Despite these setbacks, the Dow Jones Index managed to climb by 0.47%, led by a remarkable 6% surge in Johnson & Johnson’s stock, fueled by robust quarterly business data. As a result, the company raised its profit projections for the end of the current year.

“These stark discrepancies in the US stock markets come amidst the Federal Reserve’s efforts to control inflation and bring it back to its target rate of 2%.

“Recent American data indicated a significant decline in inflation rates for June, but they remained close to 3%, leaving investors and markets uncertain about whether the Federal Reserve will raise interest rates again later this year, possibly by a quarter-point increase in November, with a 30% likelihood.

“At the same time, economic data suggests that the US economy is nearing a recession, but the labor market remains robust, as evidenced by last week’s lower-than-expected jobless claims. Markets are now eagerly anticipating the release of existing home sales data next week, which could provide further insights into the housing market’s recovery.

“In conclusion, these divergent economic developments keep the US stock market in constant flux, and investors and analysts remain vigilant for new developments that may influence market trends in the coming days.”

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