The Dow Jones reached 40,000 but closed just below it. Meanwhile, two brothers face charges for a $25 million cryptocurrency heist. Amidst this, concerns over rising US government debt intensified as industry leaders Jamie Dimon and Ray Dalio emphasized the need for US debt reduction and flagged waning investor interest in Treasuries. All this and more, on the May 17 edition of World Street.
Dow Jones Crosses 40,000
The Dow Jones hit 40,000 for the first time but closed just below it, driven by strong earnings and slightly lower inflation. The Dow is up about 6 percent this year.
This is the third 1,000-point milestone in 2024. It first passed 30,000 on November 24, 2020. Investors hope cooling inflation will lead to at least two interest rate cuts by the Federal Reserve this year.
Crypto Heist
Two brothers, Anton Peraire-Bueno and James Peraire-Bueno, were taken into federal custody on Tuesday for allegedly stealing approximately $25 million in cryptocurrency within seconds by manipulating the Ethereum blockchain. The brothers, who studied math and computer science at MIT, used their expertise to exploit the Ethereum blockchain's integrity to fraudulently acquire the funds, according to prosecutors.
Meme Stocks Fall
Retail favorites GameStop and AMC declined for a second consecutive session on Thursday as the buzz surrounding "Roaring Kitty," a key figure in the 2021 meme-stock surge, waned. GameStop's shares plummeted 30 percent to $27.67 after reaching a high of $64.83 on Tuesday, while AMC's shares dropped 15.3 percent to $4.64.
Both stocks have sharply declined from their early-week gains, triggered by a series of posts from Keith Gill's "Roaring Kitty" account, known for his bullish stance on GameStop during the 2021 frenzy.
OpenAI Deal Boosts Reddit Stock
Reddit's stock jumped 11 percent in after-hours trading on Thursday following news of a partnership with OpenAI. This collaboration will enable OpenAI to train its AI models using Reddit content. Under the agreement, OpenAI will access Reddit’s Data API, granting it real-time, structured, and unique content from the platform, as stated in a press release.
US Debt Mounts
The warnings regarding the ballooning US government debt are gaining strength. Both JPMorgan's Jamie Dimon and hedge fund titan Ray Dalio have voiced their concerns in the last 24 hours. Dimon stressed on the need for deficit reduction before market forces intervene. “The sooner we focus on it, the better,” Dimon said.
Meanwhile, Dalio expressed anxiety over the declining demand for Treasuries, especially from foreign investors concerned about US debt levels and the possibility of sanctions against countries other than Russia.
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