On April 18, in the midst of anticipation for a wave of corporate earnings reports, the major stock indices in the United States showed mixed performanceThe Dow Jones Industrial Average managed to inch up by 0.06%, while the Nasdaq fell by 0.25% and the S&P 500 declined by 0.52%. This declining trend in the Nasdaq and S&P 500 marks the fifth consecutive trading session of losses for both indicesCompounding this, a series of stronger-than-expected economic data and several Federal Reserve officials making statements reinforced market expectations that the Fed is in no rush to cut interest rates.

When breaking down the performance by sectors, the S&P 500 Index reported gains in seven out of its eleven sectorsLeading the upward trend were the communication services and utilities sectors, which rose by 0.66% and 0.61%, respectivelyConversely, the technology sector and consumer discretionary sector recorded declines of 0.89% and 0.71%, leading the losses on the index.

Chinese stocks listed in the U.S

had strong performances, highlighted by a 0.99% increase in the Nasdaq Golden Dragon China IndexNotably, several popular stocks saw significant gains: New Oriental Education climbed by 2.77%, Tencent Music increased by 2.75%, while electric vehicle manufacturer Nio went up by 2.30%. Li Auto and Baidu also saw rises of 1.57% and 1.24%, respectively, which points to positive sentiment surrounding Chinese companies amid a mixed U.Smarket backdrop.

As the day progressed, streaming giant Netflix released its earnings report for the first quarter of 2024, which set the tone for a slew of anticipated reports from tech behemothsNetflix reported adding 9.33 million new subscribers during the first quarter, surpassing expectations for the second consecutive quarterRevenue stood at $9.49 billion, slightly below analysts' projections of $9.537 billionEach share yielded earnings of $5.28, a notable increase from the $2.88 reported during the same period last year.

In after-hours trading, Netflix shares saw a drop of 4.9%, following a 0.41% decline during regular market hours

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Investors attributed this downturn to somewhat disappointing revenue guidance for the upcoming quarter compared to analyst expectationsNevertheless, year-to-date, Netflix shares have appreciated by 25%, significantly outperforming the Nasdaq-100 index, which rose by just 3.38% during the same timeframe.

Meanwhile, electric vehicle pioneer Tesla saw its stock price fall by 3.55% to close at $132.27, marking a new low for the company since January 2023. Deutsche Bank adjusted its rating on Tesla from “buy” to “hold,” and slashed its target price for the stock from $180 to $123, reflecting concern over the considerable risks the company facesThis reassessment specifically highlights uncertainties related to the launch of the Model 2 and Tesla’s strategic pivot towards Robotaxi services.

Earlier this month, Elon Musk announced that Tesla is set to launch its autonomous taxi service, or Robotaxi, on August 8, 2024. This shift is viewed as a significant strategic move into artificial intelligence and robotics, propelling Tesla into a competitive arena where it faces both opportunity and risk.

Deutsche Bank's analysts noted, “We believe this transformation at Tesla is changing market perspectives, and we are concerned that its shares may need to undergo growing pains tied to changes in its shareholder base

Investors focused on Tesla's electric vehicle sales and cost advantages may opt out, eventually being replaced by investors with a longer-term view on AI and technology.”

In another market update, shares of Taiwan Semiconductor Manufacturing Company (TSMC) dropped by 4.86%, with the company reporting a first-quarter consolidated revenue of 132.455 billion Chinese yuan, reflecting a year-on-year increase of 16.5% but a 5.3% decline from the previous quarterNet profit stood at 50.397 billion yuan, up 8.9% year-on-year, though also down 5.5% sequentiallyThe company reported a gross margin of 53.1%, an operating margin of 42.0%, and a net profit margin of 38.0%.

According to TSMC’s Chief Financial Officer, Huang Ren-Chao, the recent strong earthquake in Hualien is expected to impact the gross margin by 50 basis points in the second quarterHe also mentioned that an increase in electricity costs starting in April is projected to further affect the gross margin by 70-80 basis points during the same period.

In a more positive note, Alaska Airlines saw shares rise by 4.03%, with the company anticipating that profits for the current quarter would exceed previous expectations due to surging demand as the summer travel season approaches.

Additionally, data released by the U.S

Department of Labor indicated a lower-than-expected number of initial jobless claims for the week ending April 13, which totaled 212,000 compared to anticipated figures of 215,000. This statistic suggests that the cooling trend in the U.Slabor market remains gradual.

On the same day, the Philadelphia Federal Reserve announced that manufacturing activity in the central Atlantic region accelerated in April, with the manufacturing index rising to 15.5, marking its highest level in almost two yearsNoteworthy components include a nearly 20-point increase in the prices paid index to 23, and a nearly 7-point rise in the new orders index to 12.2, alongside an 8-point rise in the shipments index to 19.1.

John Williams, President of the New York Federal Reserve, emphasized that the Fed is in no rush to lower interest rates, stating that economic data will dictate the timing of any such decision, with the possibility of rate hikes still on the table for this year.

“Monetary policy is in a good place

Current interest rates are gradually helping us achieve our goalsTherefore, I do not see any urgency to cut ratesI believe monetary policy is working out as we hoped,” Williams stated.

Raphael Bostic, President of the Atlanta Fed, also remarked on the importance of keeping interest rates stable, suggesting that any rate cuts should be considered closer to the end of the yearHe still believes that inflation is progressing towards the Fed’s target of 2%, albeit at a slower pace than anticipated.

Bostic, who has voting rights on the Federal Open Market Committee (FOMC) this year, has indicated expectations of only one potential rate cut this year.

Daniel Pinto, President of JPMorgan Chase, expressed a strong conviction that, given sustained high levels of inflation, the likelihood of interest rate cuts by the Federal Reserve this year is minimal“The Fed might need to wait much longer before implementing rate cuts, while the chances of rate hikes are very low,” Pinto remarked, adding that the Fed is unlikely to take rash actions for fear that premature cuts could induce economic pain and lead to recession.

As anticipation surrounding potential interest rate cuts dwindles among investors, the CME FedWatch tool currently gauges the possibility of a rate cut in June at 15.2% and in July at 41.5%.

In commodities, oil prices saw a slight uptick