On February 5, the U.S. stock market experienced its second consecutive day of gains. The S&P 500 Index rose 23.60 points, closing at 6061.48 points, an increase of 0.39%; the Nasdaq Composite Index also increased by 38.31 points, closing at 19692.33 points, up 0.19%. The Dow Jones Industrial Average saw the largest gain, closing up 317.24 points at 44873.28 points, a rise of 0.71%.
Despite the pressure from trade war disputes earlier in the week, investors chose to overlook these uncertainties and focused on economic data instead. Notably, the decline in the U.S. January ISM Services Index further heightened the market's expectations for Federal Reserve rate cuts.
Among individual stocks, tech giants Alphabet and AMD saw significant declines, closing down 7.3% and 6.3% respectively. Alphabet fell after its fourth-quarter earnings report revealed overall revenue below expectations and poor cloud business performance, raising concerns about its future growth prospects. AMD's stock was pressured by data center business revenues falling short of expectations.
Apple's stock saw a slight decrease of 0.14%, as the company faces pressure from Chinese regulators who might investigate its App Store fees and policies, exacerbating U.S.-China tech sector tensions.
Savita Subramanian, Head of U.S. Equity Quantitative Strategy at Bank of America, pointed out that large tech companies face ongoing challenges as they must invest heavily to stay competitive, yet these expenditures also erode their cash flow.
Meanwhile, U.S. economic data is also impacting market sentiment. The ADP Research Institute reported that U.S. job growth in January exceeded expectations, with an increase of 183,000 jobs, indicating resilience in the U.S. job market amidst rising uncertainty. However, the ISM report showed that the U.S. January Services Index fell from 54 in December to 52.8, suggesting a slowdown in economic momentum, especially as the new orders index declined to the lowest level since June.
Regarding future Federal Reserve policies, Richmond Federal Reserve Bank President Thomas Barkin stated that due to increasing economic and inflation uncertainty, the Fed would need more time to determine whether further rate adjustments are necessary.
Overall, despite some negative economic data putting pressure on the market, investors remain optimistic about stock market performance, focusing more on Federal Reserve policy moves and upcoming employment data releases.
