Wall Street Closes Higher on Tech Sector Rebound
Traders are currently pricing in a 25-basis-point rate cut in June with a 63% probability, up from 49% a week ago.
Quick overview
- European markets saw gains, particularly in banking, real estate, and healthcare sectors, while Japanese markets experienced significant declines.
- U.S. equities closed slightly higher, supported by a rebound in technology stocks led by Nvidia and Apple, despite ongoing geopolitical tensions.
- Investors are closely watching the upcoming Personal Consumption Expenditures report for insights on inflation and potential interest rate cuts.
- The STOXX 600 in Europe rose 0.5%, with notable increases in the financial and healthcare sectors, while defense and energy stocks faced declines.
European markets also posted a positive Tuesday, driven by gains in banking, real estate, and healthcare stocks, while Japan saw sharp declines.
U.S. equities closed slightly higher, amid investor caution surrounding negotiations between the United States and Iran, as well as talks between Russia and Ukraine. Europe also experienced a positive session, but Japanese markets suffered notable losses.
New York’s main indices finished nearly flat, supported by a rebound in the technology sector which, after falling as much as 1.5% during the session, erased losses by the close. The S&P 500, Nasdaq, and Dow Jones each gained 0.1%.
Nvidia and Apple led the rebound in tech stocks, offsetting declines in Microsoft and Oracle. The S&P 500 financial sector also posted gains, with Goldman Sachs and JPMorgan Chase advancing.
Concerns that artificial intelligence could disrupt traditional business models had triggered a wave of selling in software firms, brokerages, and trucking companies the previous week, leading the three major Wall Street indices to record their largest weekly drop since mid-November.
This week, attention is turning to the Personal Consumption Expenditures (PCE) report—the inflation gauge preferred by the Federal Reserve—as investors look for signals on price dynamics and future interest-rate decisions. Markets are expecting inflation to slow, which could support further rate cuts.
Traders are currently pricing in a 25-basis-point rate cut in June with a 63% probability, up from 49% a week ago, according to the CME FedWatch Tool.
European Stocks Rise, Led by Banks, Healthcare, and Real Estate
In Europe, the STOXX 600 climbed 0.5%, with the Swiss benchmark reaching a record high. Sector-wise, banks rose 1.3%, healthcare stocks gained 1.4%—their highest level since September 2024—and the real estate sector advanced 1.8%, marking its strongest level since October.
Geopolitics also took center stage after Iran’s foreign minister said Washington and Tehran had reached agreement on “guiding principles” during the second round of indirect nuclear negotiations.
Meanwhile, peace talks between Ukraine and Russia began in Geneva, mediated by the United States, focusing on the contentious issue of territorial control.
In this context, defense stocks slipped 0.2%. At the same time, the energy sector fell 0.6%, in line with a drop of more than 1% in Brent crude, while the basic materials sector declined 1.6%, pressured by weakness in gold, silver, and copper prices.
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