Stocks Show Modest Gains Ahead Of Fed's Inflation Report; Chipmakers Struggle, While Gold And Bitcoin Rebound: What's Driving Markets Thursday?

Wall Street experienced a subdued trading day on Thursday, as traders likely chose to remain on the sidelines in anticipation of Friday’s release of the Federal Reserve’s preferred inflation gauge.

In regulatory news, U.S. banks successfully passed the Federal Reserve’s 2024 stress tests. The results demonstrated that all analyzed institutions could maintain minimum capital requirements even in the face of a severe economic shock. Notably, regional banks, as tracked by the SPDR S&P Regional Banking ETF KRE, performed relatively better overall compared to their larger counterparts.

As of midday trading in New York, major indices showed marginal gains, with small caps outperforming large-cap indices.

The semiconductor sector continued to face headwinds, with the iShares Semiconductor ETF SOXX down 0.7%, eyeing its fifth negative session in the last six. Nvidia Corp. NVDA declined almost 2%.

Treasury yields moved lower, reflecting increased demand for bonds ahead of the key inflation report. The yield on the 10-year Treasury bond fell by 4 basis points to 4.29%, following an 8 basis-point increase on Wednesday. The iShares 20+ Year Treasury ETF TLT rose 0.5%.

In the commodities market, lower yields and a slightly weaker dollar spurred rebounds. Gold, tracked by the SPDR Gold Trust GLD, gained 1.2%, erasing Wednesday’s losses, while crude inched 0.7% higher.

Cryptocurrencies also saw gains, with Bitcoin BTC/USD up 1.3% and Solana SOL/USD surging over 8% following VanEck’s filing for a Solana ETF application.

Thursday’s Performance In Major US Indices, ETFs

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust SPY was 0.1% higher to $545.95.
• The SPDR Dow Jones Industrial Average DIA was 0.2% higher to $391.94.
• The tech-heavy Invesco QQQ Trust (ARCA: QQQ) was 0.2% higher to $481.55.
• Sector-wise, the Consumer Discretionary Select Sector SPDR Fund XLY outperformed, up by 0.5%, while the Consumer Staples Select Sector SPDR Fund XLP lagged, falling 0.5%.

Thursday’s Stock Movers

• Salesforce Inc. CRM rallied 6%, marking the best performance within the S&P 500.
• Goldman Sachs Inc. GS fell 2.3%, in reaction to the Fed’s stress tests.
• Among regional banks First Foundations Inc. FFWM and Dime Community Bancshares Inc. DCOM topped gains, up 5.9% and 4%, respectively.
• Amazon.com Inc AMZN increased by 2.2% after unveiling a new section on its website focused on budget-friendly fashion and lifestyle products, facilitating direct shipping from Chinese sellers to U.S. consumers. Chinese e-commerce platforms PDD Holdings Inc PDD, JD.com JD and Alibaba Group Holding BABA fell 4%, 3.8% and 1.9%, respectively.
• Walgreens Boots Alliance Inc. WBA tumbled 25%, in reaction to quarterly earnings.
• Other stocks reacting to company earnings were Micron Technologies Inc. MU, down 6.4%, Jefferies Financial Group Inc. JEF, up 6.7%, Levi Strauss & Co. LEVI, down 16.5%, McCormick & Co. Inc. MKC, up 4.6%, Acuity Brands, Inc. AYI up 0.9%, The Simply Good Foods Company SMPL, down 1.7%.

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