Markets experienced significant movement on Wednesday as investors responded to US inflation data, new progress in artificial intelligence, and several high-profile earnings reports.
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AAPLGold rises as inflation data boosts outlook for Fed pause
Gold climbed to its highest level in over two months following US consumer inflation figures that matched expectations. This reinforced the belief that the Federal Reserve is likely to keep interest rates unchanged at the September policy meeting.
Spot gold rose 1% to $4,412.68 per ounce, after reaching its strongest level since June 5. US gold futures finished 0.73% higher at $4,473 per ounce.
July’s consumer price index increased 0.1% from the previous month and 3.4% year over year. These results were in line with economists’ predictions following a 0.4% decline in June.
Data from CME FedWatch indicated the likelihood of a September interest rate hike dropped to around 40% after the inflation report, down from 46% previously.
Geopolitical concerns continued, with repeated attacks on shipping involving the US and Yemen’s Houthi group, contributing to ongoing uncertainty around the Iran conflict.
The shift in how investors access assets has accelerated as well. While conventional markets still use multiple brokers, a dramatic move toward Web3 is underway. Some market participants now use platforms such as 1stepSwap to store shares of major US companies, gold, and silver directly in their crypto wallets. By tokenizing real-world assets and sourcing the best market prices in seconds, these platforms are removing traditional intermediaries from the process.
Bitcoin falls despite lower rate hike expectations
Bitcoin traded below $63,300 even as softer inflation and weaker labor-market data gave support to expectations that the Federal Reserve will hold rates steady.
The cryptocurrency lost earlier gains, with the market’s attention turning to Thursday’s upcoming Producer Price Index report.
Analyst Rekt Capital highlighted concerns about Bitcoin’s technical levels, noting that each rebound from the $63,000 support has weakened over time.
The progressively weakening support at approximately $63,000 is evident, with rebounds declining from 6.27% to just 1.15%. At some stage, the diminishing bounces could result in a break below this key level.
Super Micro’s strong results boost AI infrastructure sector
Super Micro Computer shares surged 19% after the company posted quarterly earnings that beat Wall Street expectations and issued an optimistic revenue outlook.
Adjusted earnings reached $1.70 per share, and gross margin climbed to 17.6%, both exceeding earlier forecasts. Revenue nearly doubled to $11.1 billion compared to a year earlier, though this fell just short of analyst estimates.
Looking ahead, Super Micro Computer projected first-quarter revenue between $14.5 billion and $15.5 billion, and fiscal 2027 revenue ranging from $65 billion up to $72 billion, figures well above analyst predictions.
Executives stated that the company secured more than $60 billion in new orders during the June quarter and entered the new fiscal year with a record backlog, although some revenue was delayed as clients worked to secure power, cooling, and networking infrastructure.
The company’s previously announced $7 billion financing plan, involving equity and equity-linked securities, aims to fund future AI component purchases. The strong earnings propelled gains across the broader AI hardware sector, lifting the shares of Micron, SK Hynix, SanDisk, and Western Digital.
SpaceX stock rebounds on AI business vision
SpaceX shares advanced about 9% after CEO Elon Musk shared a bold artificial intelligence strategy at an employee event, pushing the stock price above its IPO level.
Musk predicted that AI will become a primary component of SpaceX revenue, potentially surpassing all other streams by September and significantly exceeding them in the fourth quarter.
SpaceX will soon train its Grok AI system on the complete body of company information, making employees the ‘parents of the AI,’ according to Musk.
Morgan Stanley maintained its Overweight rating and $300 price target for SpaceX, with analyst Adam Jonas citing that more advances in AI could lift the stock’s valuation.
