Dow Jones recovers entire 900 point fall on Tuesday in two sessions as TACO trade continues
Benchmark indices on Wall Street extended their gains for the second straight session on Thursday, as the TACO (Trump Always Chickens Out) trade continued to play out after the withdrawal of tariff threats on European allies sent bond yields lower.
The Dow Jones gained over 300 points on Thursday, recovering the entire 900-point fall it saw on Tuesday. The S&P 500 and Nasdaq also ended higher and are also within touching distance of recovering all of their respective losses from Tuesday as well. Smallcap stocks outperformed the S&P 500 for the 14th straight session.
Weakness in the US Dollar index, which fell below the 99 mark yet again, sent prices of haven assets soaring. Gold prices tested the $4,950 an ounce mark in the spot market, while Silver spot prices touched $96 an ounce. Crude oil prices fell after Trump’s remarks on the Russia-Ukraine war and on Iran.
Shares of Intel fell 12% in extended trading on Thursday despite an earnings beat. The company’s guidance for the ongoing quarter left Wall Street disappointed as supply issues and a strong run-up pre-earnings impacted the stock price.
In macro data reported on Thursday, the GDP print for the third quarter grew at an annualised pace of 4.4%, higher than the 4.3% estimate and the fastest in two years. Initial Jobless claims settled at 2 lakh compared to the 2.1 lakh estimate, while November’s delayed Personal Consumption Expenditure (PCE) data grew by 0.2% month-on-month and 2.8% year-on-year, both in-line with what economists had projected.
However, the savings rate for the US consumer fell to 3.5%, the lowest level since October 2022.
All eyes today will now be on the announcement of the next Fed Chair, for which US President Donald Trump has said that interviews have now been completed and that he will make an announcement soon. Focus today will also be on the Bank of Japan’s policy decision and commentary from the BoJ governor on the path ahead, particularly after the recent concerns surrounding the Japanese bond markets.