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Nasdaq Slows Down After Big Rally

Today's market analysis on behalf of Antonio Ernesto Di Giacomo - Market Analyst Latam at xs.com

 

January 31, 2024 (Investorideas.com Newswire) The Nasdaq remained very volatile since the market open on January 30, 2024. The index was at 17580 at the New York open and closed at 17380, taking a drop of more than 200 points.

The US100, last week, more exactly January 24, 2024, generated a new historical high taking the price to the 17680 zone, generating great gains for investors, but since that day we have had some small setbacks and that is due to different factors such as, for example, uncertainties regarding interest rates, macroeconomic data to be published and crucial week of financial results report of large companies.

To begin with, the volatility in the U.S. technology companies index is linked to the uncertainty regarding the possible reduction or not of interest rates by the Federal Reserve (FED), whose data will be revealed on Wednesday, January 31, 2024. Market traders are watching this release, and analysts are forecasting that rates will remain at the same level as last time, i.e. 5.50%.

Also, this week, key economic data for the United States will be released. On Thursday, February 01, 2024, new jobless claims are expected, with a forecast of 210k and on Friday, February 02, 2024, nonfarm payrolls will be announced, estimated at 173k, along with the unemployment rate forecast at 3.8%. These macroeconomic indicators are crucial to assess the country's labor stability.

Similarly, the largest market cap companies will be releasing their results this week.

On Tuesday, January 30, 2024, Alphabet (Google) announced its Q4 2023 financial reports and beat market estimates with its growth in the cloud business. However, growth in advertising fell slightly short of expectations. Despite this, Google shares fell 4% in post-market trading following the release of these results. The reported numbers include earnings per share (EPS) of $1.64 and revenue of $86.31 billion.

Also the company with the largest market capitalization published its results, Microsoft reported its second fiscal quarter that exceeded analysts' expectations, driven by the growing demand for artificial intelligence that continued to strengthen its cloud services business. The company reported earnings per share of $2.93 and revenue of $62 billion. Despite the strong results, Microsoft shares fell nearly 2% in the post-market following the release of these results.

Derived from these post-market falls of these two big technology companies, they gave a negative impulse to the Nasdaq index, making it fall more than 100 points in one hour.

But the week is not over yet and other major tech companies will present their quarterly financial reports on Thursday, February 1, 2024 and analysts have their eyes on the upcoming results. These include Apple, the second largest market cap tech company, Amazon, the world's leading online retailer, and Meta (formerly Facebook), a social media giant.

In conclusion, the Nasdaq index (US100), has had excellent movements day after day, generating historical highs and gains, but due to the results of technology companies and the economic context of the United States we will see this continuity or not.

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