Anticipation builds prior to Federal Reserve's interest rate determination, with stock market movements on ice
The stock market experienced a mixed day, with some notable movements driven by significant corporate announcements and legal developments.
In a move that weighed heavily on the market, shares for The New York Times fell more than 3% following a billion-dollar defamation lawsuit filed by President Donald Trump. The lawsuit, which seeks $15 billion in damages, alleges libel against the newspaper and several of its journalists. Court documents detailing Trump's allegations have been made public.
The Dow Jones Industrial Average also saw a dip, closing down 0.34% to 45,727 points. The S&P 500 followed suit, closing down 0.12% at 6,607 points. In contrast, the Nasdaq tech exchange and the Nasdaq 100 and Composite barely budged.
However, not all news was negative. Candy maker Hershey benefited from a double upgrade by Goldman Sachs, with the firm changing its rating from 'Sell' to 'Buy'. As a result, Hershey shares rose 2.5%. Experts praised the positive development of Hershey's market share.
Disney also saw mixed results following the announcement of a collaboration with Webtoon Entertainment. While the collaboration will bring all of Disney's well-known comics, including those from the Star Wars and Marvel universes, together on a new digital platform and app, Disney will take a 2% stake in Webtoon Entertainment as part of the deal. This move led to a surge in Webtoon Entertainment shares, with a 29% increase recorded.
The future path of interest rates remains uncertain, with market analyst Jochen Stanzl of CMC Markets predicting a 0.25 percentage point cut in the key interest rate by the Fed. Another analyst, Jochen Stanzl, suggested a small chance of a 0.50 point cut in the key interest rate by the Fed. Lower interest rates make the present value of future high tech company earnings higher, which could potentially boost the Nasdaq tech exchange.
In the S&P 500, losers have outnumbered winners on most days recently. Half of the Nasdaq index members have been in the red since the start of the recent rally. The Nasdaq tech exchange, however, has seen significant euphoria due to hopes of monetary policy easing.
President Donald Trump accused The New York Times and several journalists of intentionally and maliciously defaming him before the 2024 presidential election. In light of this, it remains to be seen how the ongoing legal battle between Trump and The New York Times will impact the market in the future.
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