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21.05.2025 12:40 PM
Falling indices, Tesla's surge, and Julius Baer's collapse: a day of sharp contrasts in the markets

Rge benchmark stock indices are falling:

* Dow -0.27%,

* S&P 500 -0.39%,

* Nasdaq -0.38%

Tesla is rising after Musk announced his willingness to return as CEO. Home Depot reverses gains after Q1 sales report.

This image is no longer relevant

European stocks retreat from two-month highs

Julius Baer shares tumble. Market participants are shifting their focus to US trade talks.

Declines driven by debt concerns On Tuesday, US stock markets turned negative, ending the S&P 500's six-day winning streak. The reason: a sharp rise in US Treasury yields, which reignited concerns about the sustainability of the US government debt.

Trump pushes tax reform Former President Donald Trump arrived in Congress to persuade Republicans to support a major tax reform. Analysts believe it could add $3�5 trillion to the already massive national debt, which exceeds $36 trillion.

Sectors and stock indices: winners and losers Amid the broader downturn, 8 out of 11 S&P 500 sectors ended in the red. The greatest pressure was felt in energy, communications, and consumer discretionary sectors. In contrast, utilities, healthcare, and consumer staples sectors posted gains.

Snapshot of key US stock indices

Dow Jones: �114.83 points (�0.27%) to 42,677.24

S&P 500: �23.14 points (�0.39%) to 5,940.46

Nasdaq Composite: �72.75 points (�0.38%) to 19,142.71

Markets await signals from the Fed Investors closely monitored comments from Federal Reserve officials, especially St. Louis Fed President Alberto Musalem. Remarks on future monetary policy moves could shape market direction.

US credit rating under pressure Ratings agencies Moody's, Fitch, and S&P Global Ratings have all voiced concerns over US debt levels and downgraded the country's sovereign rating. This added pressure on investors.

Focus on the Fed: rate cuts are just a matter of time? Traders are pricing in two interest rate cuts from the Fed over the next 18 months. According to LSEG, the first could come as soon as September. Meanwhile, the 10-year US Treasury yield inched up to 4.481%.

Home Depot report beyond expectations, but market unimpressed Home Depot shares initially rose after beating analysts' sales forecasts for the quarter, but enthusiasm faded quickly.

STOXX 600: a step back from the peak The pan-European STOXX 600 index fell 0.2% on Wednesday morning after hitting a two-month high. Auto and retail stocks performed the weakest.

Julius Baer: credit risks shake investor confidence Swiss bank Julius Baer came under the spotlight after reporting CHF 130 million in losses related to a credit portfolio review. Investor reaction was swift: shares plunged 5.6%. The chief risk officer also resigned.

JD Sports: weak start and worrying outlook British retailer JD Sports came under pressure after reporting a 2% drop in core sales in Q1 and warning that rising US prices could significantly impact consumer activity. Shares plunged 8.4%, placing the company at the bottom of the STOXX 600.

UK inflation surprise catches analysts off guard April's inflation data in the UK alarmed markets, coming in higher than expected�especially in segments closely watched by the Bank of England. This complicates the central bank's task of cutting rates and casts doubt on the prospect of a "soft landing."

Trade risks: time running out Investors are further unsettled by the lack of progress in trade negotiations. The temporary delay in tariffs announced by Donald Trump is nearing its end, while the major US tax reform bill is increasing anxiety about fiscal stability.

Infineon and Nvidia: alliance for the AI future German semiconductor giant Infineon rose 1.7% after announcing a partnership with Nvidia. The companies will collaborate on energy-efficient chip development for data centers, with a focus on AI-powered systems.

Marks & Spencer hit by cybercriminals British retailer Marks & Spencer came under pressure after reports of a large-scale cyberattack. The company announced it expects the incident to reduce operating profit by about £300 million (approx. $403 million). Shares fell 3.3% in light of the news.

Gleb Frank,
Pakar analisis InstaForex
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