U.S. markets were mixed in early trading Thursday, a day after the Federal Reserve opted to keep its benchmark interest rate unchanged just hours after the government said consumer inflation cooled more than expected last month.
Futures for the Dow Jones Industrial Average lost 0.3% before the bell, while futures for the S&P 500 edged a little more than 0.1% higher.
Wall Street's lust over anything related to artificial intelligence was again on display after chipmaker Broadcom beat sales and profit targets on the strength of its AI business. Shares in Broadcom rose 14.3% before markets opened on Thursday. Broadcom's revenue grew 43% over the same quarter last year and sales of AI-related products and services grew to a record $3.1 billion.
Tesla jumped 6.5% after its CEO Elon Musk said in a post on his social media platform X that early results indicated shareholders would vote overwhelmingly to restore his $44.9 billion pay package. That all-stock compensation package was denied by a Delaware judge earlier this year after a group of shareholders sued Musk and the company's board. Tesla shareholders will also vote on a proposal to move the company's state of incorporation from Delaware to Texas.
Arcade and restaurant chain Dave & Buster’s tumbled more than 10% in premarket after it reported flagging sales and missed Wall Street’s profit targets.
As expected on Wednesday, the Federal Reserve kept its main interest rate steady following its latest policy meeting. And Treasury yields dropped after a report on inflation showed U.S. consumers paid prices that were 3.3% higher for food, insurance and everything else last month from a year earlier. Economists had been expecting to see the inflation rate stuck at 3.4%.
Lower inflation helps U.S. households struggling to keep up with fast-rising prices and also opens the door for the Federal Reserve to cut its main interest rate. Such a move would ease pressure on the economy and give a boost to investment prices.
Fed Chair Jerome Powell said Wednesday that U.S. central bank officials need to see more evidence that inflation is tracking closer to its goal of 2% before it starts cutting rates.
Coming later Thursday is the government's report on inflation at the wholesale level and its weekly report on layoffs.
Elsewhere, shares fell sharply in Europe as leaders of the Group of Seven leading industrialized nations were gathering in Italy in the wake of the European Parliament election that saw a surge in support for the far right in places like France and Germany.
The G7 summit through Saturday is focusing on global conflicts, the spread of artificial intelligence and on African issues, with a view in particular to Italy’s longstanding concern about uncontrolled migration to Europe and human traffickers. Perennial issues such as climate change and China also were on the agenda.
France's CAC 40 shed 1.2% by midday, while Germany's DAX tumbled 1.1%. Britain's FTSE 100 fell 0.4%.
In Asia, investors were turning their attention to a meeting of Japan's central bank that ends on Friday. The Bank of Japan is not expected to raise its benchmark rate this time, though the economy is under pressure from the dollar's prolonged surge against the Japanese yen.
“Given the recent ‘hawkish hold’ outcome from the Fed, if the BOJ were to stick to its usual accommodative tone in terms of policy settings, that may pave the way for the upward trend in the U.S. dollar to the Japanese yen to continue,” Yeap Jun Rong, a market analyst at IG, said in a commentary.
In currency trading, the U.S. dollar edged up to 157.23 Japanese yen from 156.71 yen. The euro fell to $1.0784 from $1.0812.
Japan’s benchmark Nikkei 225 dipped 0.4% to finish at 38,720.47. Australia’s S&P/ASX 200 surged 0.4% to 7,749.70. South Korea’s Kospi jumped 1.0% to 2,754.89. Hong Kong’s Hang Seng gained nearly 1.0% to 18,112.63, while the Shanghai Composite declined 0.3% to 3,028.92.
In energy trading early Thursday, benchmark U.S. crude lost 72 cents to $77.78 a barrel. Brent crude, the international standard, fell 63 cents to $81.97 a barrel.
On Wednesday the S&P 500 climbed 0.9%, adding to its all-time high set a day before. The Nasdaq composite rose 1.5% and the Dow slipped 0.1%.
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