Opening Bell - Morning Commentary
Dow Hits Record Highs While AI Doubts and Surging Jobless Claims Drag Technology Lower. Nifty eyes a close above 26000, focus to shift to mid and small stocks.
Markets diverged as the S&P 500 and Dow hit record closes following a less hawkish-than-expected Federal Reserve policy update, while the Nasdaq declined amid Oracle's disappointing results.
The Dow and Russell 2000 reached new highs, but surging jobless claims raised labour market concerns, pulling down the dollar and Treasury yields.
The Dow's surge was partly driven by Visa, which rose 6.1% on a broker upgrade, along with substantial gains in Nike, UnitedHealth, and American Express.
Oracle plunged 13%, triggering a tech selloff after massive spending and weak forecasts raised doubts about AI investment returns. The company's fiscal Q2 earnings beat estimates but revenues disappointed, highlighting uneven gains from AI technology despite widespread belief in its transformative potential.
NVIDIA and other AI stocks also declined, suggesting renewed valuation concerns.
Broadcom projected first-quarter revenue above estimates on Thursday but warned margins would compress due to a higher AI revenue mix, sending shares down 5% after hours.
Initial jobless claims jumped to 236,000 for the week ending December 6—up 44,000 from the prior week's revised 192,000, exceeding expectations.
Gold rose on Thursday to hit its highest level in more than a month after the U.S. Federal Reserve's quarter-point rate cut pushed the dollar lower, while silver surged to a record high.
Nifty snapped its three-session losing streak yesterday, gained 140 points to close at 25,898.
Over the past three sessions, Nifty has consistently tested the 50-DEMA at 24,735, establishing a short-term base near this level that should provide strong support as we advance. On the upside, 26202 remains a positional hurdle for the bulls.
Nifty eyes a decisive close above 26,000, shifting market attention toward mid and small-cap stocks for near-term opportunities.
Indian markets are poised to open higher in line with positive global cues.