U.S. stock markets succeed in turning

02/06 U.S. stock markets succeed in turning higher on strength of weak dollar, falling interest rates

The U.S. stock market started lower in the wake of Alphabet (-6.94 percent) and AMD (-6.27 percent). However, the ISM service industry index results and the announcement of the government bond issuance plan showed strength to shift upward as the dollar weakened and interest rates fell. However, as trade dispute issues continue, the sale of each stock is being digested rather than expanding the rise. In particular, small-cap stocks are clearly strong as some companies related to biotech using AI, space development with issues, and quantum computer are focusing on buying rather than large-cap stocks (Dow +0.71 percent, Nasdaq +0.19 percent, S&P 500 +0.39 percent, Russell 2000 +1.14% and Philadelphia Semiconductor Index +2.31%)

*Variants: Interest Rates Fall and Dollar Weak

The ADP’s private employment report in the U.S. reported 1830,000 cases, up from 1760,000 last month. In general, employment in consumer-related industries is robust, but business services and production sectors are weak. The wage growth rate was announced at 4.7 percent, up 0.1 percentage point for incumbent workers, and 6.8 percent for turnover workers, down 0.1 percentage point. The overall job market is solid, but it is not as solid as in the past due to weakened hiring activities.

The ISM service industry index came in at 52.8, down from 54.0, which was announced last month. New orders fell 3.1p and the production index also fell 3.5p. Most of the detailed indicators are weak, with the price index also falling 4.0p. While many industries reported that bad weather conditions along with tariffs affected them, the retail sector’s announcement that consumption at the end of the year was not as strong as expected also seems to have caused the indicator to be sluggish.

Along with the results of these indicators, interest rates on government bonds fell when the U.S. government announced that it would maintain the current level of long-term government bonds until 2025. The market predicted that Trump’s election would lead to a sharp increase in government bond issuance, but the maintenance announcement has resolved one of the strongest reasons for the rise in government bond rates. In addition, the strong euro following the passage of a no-confidence bill by the French Prime Minister’s Parliament and the strong yen due to increased wages are also factors that weaken the dollar

As interest rates on government bonds fell and the dollar weakened, the stock market remained solid. Although the U.S.-China trade dispute still remains, as interest rates and the dollar weakened without traumatizing the market, buying flowed in and succeeded in turning upward. Of course, there are many performance announcements, which also characterizes the differentiation of individual companies.

*Featured stocks: Nvidia, Broadcom rise Vs. Alphabet, AMD, Tesla fall

Nvidia (+5.21%) and Broadcom (+4.30%) and Marvelltyk (+6.17%) rose thanks to Alphabet’s significant upward revision of capital spending. In particular, 9% of total sales are estimated to be Google-oriented sales of Broadcom, 5% of Nvidia, and 23% of Marvelltyk. TSMC (+2.22%), Micron (+3.24%), Intel (+1.87%)
Equivalence rose. Super microcomputer (+7.99 percent) gained ground on news of server production with Nvidia Blackwell chip, while Dell (+2.73%) and Arista Network (+2.82%) also rose. AMD (-6.27%) fell sharply, reflecting sluggish data center sales despite solid performance. Philadelphia Semiconductor Index rose 2.31 percent. ARM (+6.82%) is down 5% after-hours on EPS slump, in line with expected sales despite good performance. Qualcomm (+1.63%) is down 2% despite better-than-expected earnings and guidance announcement

Alphabet (-6.94 percent) fell in the wake of weaker-than-expected sales, especially in the cloud service sector. It also bears news of an anti-trust investigation in China. Amazon (-2.43 percent), which reports Thursday’s earnings, also fell due to cloud sales concerns. Mata Platforms (+0.10 percent), which also rose due to strong advertising sales of Alphabet, traded flat. MS (+0.22 percent) edged higher. Apple (-0.14 percent) narrowed its fall after falling on news that Chinese regulators were considering investigating the app store as an anti-competitive practice. Power grid-related companies such as Vistra (+1.95%), Constellation (+2.45%) and GE Vernova (+3.20 percent) rose, reflecting Alphabet’s expectations for increased capital spending.

Tesla (-3.58%) is estimated to have seen a sharp drop in vehicle sales in California, the U.S., and also in France and Denmark. Amid this development, the market fell after news that the market plunged 59 percent to its lowest level in years today. The market has continued to rise, reflecting events in the distant future, but concerns are that its earnings could worsen immediately. Secondary battery businesses such as QuantumScape (-1.58%) and Albemarle (-3.15%) are also sluggish. Uber (-7.56 percent) forecast that the number of bookings for the first quarter will grow 17-21 percent despite its better-than-expected earnings report. Lyft (-4.62%) and Grab (-10.76 percent) also fell. After the market closed, Ford (-1.48 percent) is down 5 percent due to weak outlook for this year.

Eli Lilly (+1.95%) is stronger than expected in the Novo Nordisk (+3.76%) earnings report, especially after better-than-expected sales of its obesity treatment. Viking Therapeutics (+3.49%) also rose. Viking is down 3% on weak earnings after the market closed. Pharmaceutical sectors such as Pfizer (+2.20%), Evby (+0.95%), and Gilead Sciences (+1.69%) rose sharply as Amgen (+6.50) reported better-than-expected earnings. Lower interest rates and earnings results from individual companies led the decline. Merck (-1.18%) remained sluggish after the company reported earnings the previous day. UnitedHealth (-1.03%) fell after Akman announced that it would take a short position, saying its earnings had been overstated. Akman deleted the related post and the decline was reduced when UnitedHealth expressed concern to the U.S. Securities and Exchange Commission.

SEALSQ (+23.23%) jumps sharply as the company announced it will hold SEALSQ quantum day on Feb. 11 on Nasdaq. D Wave Quantum (+8.30%) surges as it announced it will hold quantum computing user conferences from 3/31 to 4/1. Others include IONQ (+1.10%), LIGETTY COMPUTING (+0.8)