Stock Markets Recap: US Tech Stock Frenzy Sets Up Positive Tuesday Asian Session

Bob Mason
Updated: Jun 18, 2024, 00:54 GMT+00:00

Key Points:

  • On Monday (June 17), the Nasdaq Composite Index extended its winning streak to six sessions.
  • The RBA interest rate decision and central bank commentary will warrant investor attention on Tuesday (June 18).
  • Investors should also monitor trade-related chatter from Beijing after the EU trade tariffs on EV exports to the EU.
Stock Markets Daily Recap

In this article:

US Equity Markets:

On Monday (June 17), the Nasdaq Composite Index and S&P 500 saw gains of  0.95% and 0.77%, respectively. The Dow advanced by 0.49%.

Tech stocks continued to lead the way, with the Nasdaq extending its winning streak to six sessions.

Investor bets on multiple 2024 Fed rate cuts continued to drive buyer demand for tech stocks, with AI remaining a focal point.

US Manufacturing Sector

US economic indicators influenced investor expectations of a soft landing. The NY Empire State Manufacturing Index rose from -15.6 to -6.0 in June. Better-than-expected numbers eased fears of a hard landing. However, the manufacturing sector data will unlikely influence the Fed rate path. The manufacturing sector accounts for less than 30% of the US economy.

Investors remained hopeful of a September Fed rate cut despite the more hawkish FOMC Economic Projections.

According to the CME FedWatch Tool, the probability of the Fed standing pat in September increased from 29.8% to 38.5% on Monday. 10-year US Treasury yields advanced but remained well below May levels.

The Winners and Losers

On Monday, Apple Inc. (AAPL) rallied 1.97%, with Microsoft (MSFT) advancing by 1.31%. Alphabet Inc. (GOOGL) and Meta Platforms (META) saw gains of 0.23% and 0.49%, respectively. (AMZN) rose by 0.22%.

However, Tesla Inc. (TSLA) was among the top performers, jumping 5.30%. Investors reacted to shareholders approving a record pay package for Elon Musk.

Adobe (ADBE) and NVIDIA (NVDA) bucked the trend, falling by 1.25% and 0.68%, respectively.

Global Market Influences: EU Tariffs, French Politics, and the RBA

In the near term, investor hopes for multiple 2024 Fed rate cuts, and buyer demand for tech stocks remains the headline. However, several headwinds linger, leaving the Asian equity markets exposed to the potential for more losses.

Investor jitters about the snap French general election, the stability of EU projections, and a possible Beijing retaliation to EU tariffs on EV exports from China could impact buyer demand for riskier assets.

Furthermore, recent economic indicators from China sent mixed signals about the macroeconomic outlook. As investors consider the Fed rate path, uncertainty about the BoJ and RBA rate paths and China also warrant investor consideration.

Asian Economic Calendar: The RBA in Focus

On Tuesday (June 18), the RBA interest rate decision and press conference may affect buyer demand for ASX 200-listed stocks. Recent economic indicators sent mixed signals, which could influence investor expectations of a 2024 RBA rate cut.

The Australian unemployment rate fell from 4.1% to 4.0% in May. However, job ads tumbled 2.1% in May after a 2.3% slide in April, signaling a deteriorating labor market environment.

In recent RBA press conferences, RBA Governor Michele Bullock highlighted the importance of the Australian labor market. Concerns about employment could force the RBA Governor to take a more dovish stance on monetary policy. Signals of a 2024 RBA rate cut could drive buyer demand for ASX 200-listed stocks.

However, investors should monitor commentary from Beijing and Bank of Japan chatter. A Beijing response to the EU tariffs on EV exports from China could affect near-term trends for the Hang Seng Index.

Furthermore, hawkish Bank of Japan commentary could impact buyer demand for Nikkei Index-listed export stocks. Concerns about the effects of a weaker Yen on the Japanese economy leave the Nikkei exposed to the threats of a BoJ rate hike.

On Monday (June 17), gold spot (XAU/USD) declined by 0.58% to $2,319. However, WTI crude oil rallied 2.40% to $80.33 on demand sentiment. Iron ore spot advanced by 0.59%.

Commodity price trends will influence the ASX 200 before the RBA interest rate decision and press conference.

On Monday, the USD/JPY advanced by 0.21%, closing the session at 157.708. A stronger USD/JPY could support buyer appetite for Nikkei-listed export stocks.

For upcoming economic events, refer to our economic calendar.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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