Stock market experiences a drop following Monday's surge, as consumer price index moderates and S&P 500 forecast brightens.
Stock markets showed mixed signals on Tuesday, with the Dow Jones Industrial Average dropping around 150 points, contrasting the S&P 500 and Nasdaq's minor gains. This shift followed a monumental rally on Monday, when the Dow surged over 1,100 points, fueled by optimistic Washington-Beijing trade talks.
On this particular day, the consumer price index (CPI) showed an increase of 2.3% year-on-year – the lowest growth rate since 2021. According to Chris Zaccarelli, chief investment officer at Northlight Asset Management, the markets have seen a significant easing of their twin fears: a potential tariff-induced recession and stubborn inflation. Consequently, Zaccarelli suggests the markets should keep the "yesterday's celebration" going.
Analysts at Goldman Sachs boosted their S&P 500 target from 6,200 to 6,500 over the next 12 months, signaling a potential 11% gain. This revised forecast represents a turnaround from two earlier cuts in March, which were due to heightened recession risks and tariff-driven uncertainty.
Boeing's shares climbed around 2.5% after the opening bell, spurred by Bloomberg reports suggesting China might lift its ban on the delivery of Boeing aircraft.
Coinbase, the crypto trading platform, saw its stock skyrocket approximately 10% on the day it was confirmed it would be joining the S&P 500 index on May 19. Includion in the S&P 500 index is a significant achievement that often results in increased visibility, credibility, lower capital costs, and market capitalization legitimacy for companies.
Being part of the widely-followed index may draw more institutional and retail investors, with programmatic buying of shares by various funds and ETFs that track the index. In Coinbase's case, this significant inclusion can signal broader acceptance by traditional financial institutions and potentially attract new investors.
- Investors who are interested in cryptocurrencies might find the inclusion of Coinbase in the S&P 500 index beneficial, as it could signal broader acceptance by traditional financial institutions and potentially attract new investors.
- The addition of Coinbase to the S&P 500 index on May 19 could result in increased visibility, credibility, lower capital costs, and market capitalization legitimacy for the crypto trading platform.
- While the stock market showed mixed signals on Tuesday, with the Dow Jones Industrial Average falling and the S&P 500 and Nasdaq experiencing minor gains, the crypto market may have seen different movements, such as a potential increase in Coinbase's stock price.
- As Goldman Sachs raised their S&P 500 target from 6,200 to 6,500 over the next 12 months, some investors might be looking for alternative investment opportunities outside of the stock market, such as Initial Coin Offerings (ICOs) or Decentralized Exchanges (DEXes).
