The stock market is showing signs of fragility after a federal judge’s ruling against Visa and Mastercard. On Friday, U.S. District Judge Margo Brodie struck down a preliminary $30 billion settlement with merchants over swipe fees. This decision reverberates through the financial sector.
Judge Brodie criticized the proposed $6 billion annual savings for merchants as “inadequate” compared to the staggering $100 billion in fees paid to Visa and Mastercard in 2023 alone. Her assessment implies that Visa and Mastercard could shoulder a much heftier settlement.
The ruling triggered a downturn on Wall Street, breaking a three-week winning streak for the S&P 500. The benchmark index slipped by 0.4% on Friday, ending the week in negative territory. The Nasdaq composite dropped 0.7%, while the Dow Jones Industrial Average dipped by 0.1%.
Big tech stocks also felt the pressure during this sell-off, exacerbating market declines. Apple fell by 1.6%, Microsoft lost 1.3%, and Meta Platforms tumbled by 3%. These companies have been pivotal to recent market gains, making their pullback noteworthy.
Ross Mayfield from Baird linked this late-afternoon selling spree to traders cashing in profits or rebalancing portfolios as Q2 wraps up.
Despite these drops, overall market sentiment remains cautiously optimistic based on online s and social media chatter.
Technical indicators offer further insights: — The Relative Strength Index (RSI) stands at 63.29. — This figure suggests markets are neutral. — No divergence implies that reversals are unlikely at present. — Volume data shows no changes this week, complicating trend analysis.
Considering these elements — neutral RSI levels alongside some profit-taking — the short-term outlook appears mixed but mildly optimistic.
Investors should stay vigilant next week as they navigate potential volatility stemming from judicial rulings impacting major financial institutions like Visa and Mastercard. Monitoring any shifts in tech giants’ performance trends will be crucial, as these could either bolster or drag down broader indices as we transition into Q3.
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