US stock markets staged a significant recovery on Thursday, with the three major indices rebounding sharply from a sell-off in the previous session triggered by the Federal Reserve signaling the possibility of a rate hike this year. Markets will be closed on Friday for the Juneteenth holiday.
According to US Treasury data, China's holdings of US Treasury securities stood at $651 billion in April, down from $652 billion in March. Japan's holdings increased to $1.210 trillion from $1.192 trillion, while the UK's holdings rose to $938 billion from $927 billion over the same period.
US Markets
The Dow Jones Industrial Average closed up 72.71 points, or 0.14%, at 51,565.26. The Nasdaq Composite surged 496.27 points, or 1.91%, to 26,517.93. The S&P 500 gained 80.48 points, or 1.08%, to finish at 7,500.58.
SpaceX (SPCX) shares closed down 3.56%, after falling as much as 10% intraday. Semiconductor stocks remained strong throughout the session. Marvell Technology (MRVL) gained 7.27%, Intel (INTC) jumped 10.64%, and Micron Technology (MU) rose 8.7%. The Nasdaq Golden Dragon China Index fell 0.89%.
European Markets
Germany's DAX 30 index added 87.01 points, or 0.35%, to 25,018.56. The UK's FTSE 100 dropped 118.89 points, or 1.13%, to 10,389.72. France's CAC 40 gained 37.19 points, or 0.44%, to 8,467.98. The Euro Stoxx 50 rose 21.13 points, or 0.34%, to 6,321.20. Spain's IBEX 35 fell 32.35 points, or 0.17%, to 19,382.75. Italy's FTSE MIB increased by 122.27 points, or 0.23%, to 52,717.50.
Asian Markets
Japan's Nikkei 225 index rose 1.65%, South Korea's KOSPI gained 2.25%, and India's Sensex index was up 0.33%.
US Dollar Index
The US Dollar Index, which measures the greenback against a basket of six major currencies, rose 0.75% to 100.846. In late New York trading, one euro bought $1.1459, down from $1.1539. One pound bought $1.3203, down from $1.3338. One dollar bought 161.68 Japanese yen, up from 160.50. It also bought 0.8051 Swiss francs, up from 0.7971; 1.4140 Canadian dollars, up from 1.4071; and 9.5874 Swedish kronor, up from 9.4610.
Cryptocurrencies
Bitcoin fell as much as 3.4% intraday to around $62,184. Ethereum dropped to a low of $1,705.97.
Crude Oil
July delivery West Texas Intermediate crude futures fell 19 cents, or 0.25%, to settle at $76.60 per barrel. August delivery Brent crude futures rose 30 cents, or 0.38%, to settle at $79.85 per barrel.
Precious Metals
Spot gold edged down to $4,201.98 per ounce. Spot silver fell to $65.73 per ounce.
Macroeconomic News
US weekly initial jobless claims fell, indicating continued resilience in the labor market. Data from the Labor Department showed initial claims decreased by 4,000 to 226,000 for the week ending June 13, compared with market expectations of 225,000. However, continuing claims rose to 1.81 million in the prior week. This data, along with a stronger-than-expected jobs report for May showing 172,000 new positions, has eased concerns about a significant hiring slowdown and reinforced investor bets on Fed rate hikes.
Iran has announced that vessels applying for passage through the Strait of Hormuz will be exempt from related fees for a 60-day period, with the costs borne by the Iranian government, according to a statement from its Supreme National Security Council.
Analysts note that Federal Reserve Chair Waller's preference for providing minimal forward guidance on interest rates, while preserving policy flexibility, risks ceding narrative control to the market. This could lead to misinterpretations that require later clarification, potentially increasing market volatility. This approach contrasts with other Fed officials who continue to speak frequently about the economic outlook and potential policy responses.
Company-Specific News
SpaceX (SPCX) plans to issue at least $20 billion in bonds to refinance a bridge loan, with its banking syndicate potentially starting investor calls as early as next week. The proceeds would be used to replace a $20 billion bridge loan maturing in September 2027, which constitutes a major portion of the company's $29.1 billion in long-term debt.
Amazon.com (AMZN) is in talks to sell its in-house artificial intelligence chips to other companies' data centers, expanding its efforts to challenge NVIDIA's dominance. Amazon's AI chief stated the company is looking for ways to serve more customers as AI infrastructure evolves rapidly. Its Trainium chip, launched in 2020, has already attracted major clients through AWS, and the latest generation is reportedly "essentially sold out."
Intel (INTC) announced the appointment of Seok-Hee Lee as Executive Vice President of Intel Foundry, reporting to CEO Lip-Bu Tan. Lee will lead all advanced packaging, system integration, back-end technology R&D, and back-end manufacturing, aiming to enhance the company's ability to deliver differentiated system-level innovation. This move establishes advanced packaging as a distinct business focus, reflecting its growing importance for AI system performance and efficiency.
Analyst Ratings
S&P Global Ratings assigned SpaceX (SPCX) a 'BBB' credit rating with a stable outlook. The rating reflects SpaceX's solid launch and connectivity businesses, which are partly offset by significant capital requirements and uncertainty in its AI ventures. S&P noted the rating does not incorporate the company's long-term plans for lunar landings, Mars missions, or space-based data centers, as these are not yet quantifiable, but acknowledged they may require future long-term financing. S&P expects the company's adjusted leverage to remain below 2.0x despite substantial investment plans.
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