November 21, 2024

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Dow closes at record high while S&P 500, Nasdaq slide as tech lags #NewsUnitedStates

Dow closes at record high while S&P 500, Nasdaq slide as tech lags #NewsUnitedStates

CashNews.co

The Dow Jones Industrial Average (^DJI) notched a record close on Monday while the other two major averages slid as investors weighed the imminent arrival of interest rate cuts and braced for a busy week dominated by Nvidia’s (NVDA) earnings report.

The Dow Jones Industrial Average rose more than 0.1% to close at a new high of 41,240.52. The S&P 500 (^GSPC) slipped 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) sank roughly 0.8%.

Technology lagged during the session as shares of AI chip giant Nvidia fell 2% along with semiconductor peer Broadcom (AVGO) and EV maker Tesla (TSLA).

Stocks are coming off weekly gains, notched after Chair Jerome Powell made it crystal clear the Fed is ready to pivot to lowering rates in September. The major indexes all gained more than 1% last week.

Markets quickly moved to price in cuts totaling 1% by the end of 2024. But with only three Fed meetings left in the year — in September, November, and December — and the August jobs report still to come, Wall Street is wondering when and whether a 0.5% cut is likely.

Now, the focus is firmly on Nvidia’s earnings report — the marquee event of the week — which will likely determine whether the market mood stays upbeat. If the chipmaker’s results on Wednesday fail to meet sky-high expectations, that could further dent the AI trade, which has powered stock gains, and, in turn, put the market’s rebound from August lows to the test.

Also ahead is a Friday update on Fed policymakers’ preferred inflation gauge, the PCE index print, which is likely to feed into rate-path calculations. Also on deck is a reading on second quarter GDP on Thursday.

Meanwhile, oil prices jumped around 3% amid reports of production shutdowns in Libya and fears of escalating Mideast tensions after Israel and Hezbollah launched strikes. Global benchmark Brent crude futures (BZ=F) settled at $81.43 a barrel, while US benchmark WTI crude futures (CL=F) closed at $77.42 a barrel.

LIVE COVERAGE IS OVER12 updates

  • Dow closes at record, S&P 500, Nasdaq lag as tech stocks retreat

    The Dow Jones Industrial Average (^DJI) closed at a record high on Monday while the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) slipped as shares of Nvidia (NVDA) fell roughly 2% ahead of its highly anticipated quarterly results later this week.

    The Dow Jones Industrial Average rose 0.1% to close at 41,240.52 as Materials (XLP), Utilities (XLU), and Energy (XLE) gained.

    Technology (XLK) stocks underperformed during the session with Broadcom (AVGO) and EV maker Tesla (TSLA) falling more than 3%, dragging on the Nasdaq and S&P 500.

    PDD Holdings (PDD), also known as Pinduoduo, the parent company of e-commerce platform Temu, tumbled 28% following the release of disappointing second quarter results.

    Stocks were coming off Friday gains after Fed Chair Jerome Powell indicated policymakers were ready to pivot and cut at the next FOMC meeting in September.

  • History shows aggressive Fed rate cuts might not be a good thing for stocks

    Now that Fed Chair Jerome Powell has opened the door for a rate-cutting cycle to begin, economists have reasoned how deeply the Fed will cut in 2024 will largely depend on how the labor market holds up.

    If the August jobs report, due out on Sep. 6, confirms that labor market weakness in the July report may have been overstated, many economists argue the Fed will begin with a 25 basis point interest rate cut.

    In other words, the Fed wouldn’t need to slash rates because of persistent signs the economy is weakening. And to many strategists, this remains the key thing investors should be focusing on when thinking about Federal Reserve cuts.

    If the Fed cuts because the economy needs help, it hasn’t been good for stocks. Research from Truist co-chief investment officer Keith Lerner sent to clients on Monday shows that the S&P 500 was at least 11% higher a year after the first Fed interest rate cut dating back to 1989, as long as the economy remained on solid footing.

    However, when the US economy entered recession in the following 12 months, the S&P 500 fell by at least 14% over the next year, per Lerner’s research.

    This provides a clear read-through for today’s environment. If the Fed is forced to cut more aggressively because of a significant downturn in the labor market, history says that isn’t a welcome sign for the stock market.

  • Nvidia to report Q2 earnings Wednesday in major test for AI trade

    Nvidia (NVDA) stock fell more than 2% on Monday as investors await the chip giant’s quarterly results set for Wednesday after the closing bell.

    Yahoo Finance’s Dan Howley reports:

    Nvidia’s earnings announcement — the most anticipated results of the quarter — will send ripple effects throughout the tech sector as investors look for signs that the AI trade will continue to dominate market conversations into the second half of the year.

    Nvidia stock is up more than 163% year to date and 60% in the last six months. Rival AMD’s (AMD) stock price is up 9% year to date and down some 14% over the last six months.

    Intel (INTC) shares have collapsed 57% since the start of the year and are down 53% over the last six months as the company continues to struggle amid its massive turnaround effort.

    Read more here.

  • Investors are betting the Powell pivot will relieve regional bank woes

    Yahoo Finance’s David Hollerith reports:

    A pivot from Federal Reserve Chair Jerome Powell has investors betting that US bank stocks are poised to move higher as lower interest rates are expected to provide much-needed relief to some beleaguered lenders.

    That wager sent an index tracking midsize regional banks (^KRX) up 5% Friday, the biggest single-day advance for the index in all of 2024. It held those gains Monday.

    That considerable move came after Powell gave markets the all-clear signal by saying “the time has come to adjust policy,” setting up the first Fed cut in more than four years.

    An index tracking the wider banking sector (^BKX) is now up more than 18% on the year, in line with the performance of the S&P 500 (^GSPC).

    Read more here.

  • Oil prices jump 3% on Middle East tensions, Libya production halt

    Oil prices jumped sharply on Monday amid a halt in Libyan oil production and heightened tensions in the Middle East.

    West Texas Intermediate (CL=F) rose as much as 3% to hover above $77 per barrel, while Brent (BZ=F), the international benchmark price, increased more than 2% to trade above $80 per barrel.

    Over the weekend, Israel implemented an airstrike against Tehran-backed Hezbollah’s rocket launching stations in Lebanon, adding to fears of a broader conflict involving Iran breaking out in the region.

    “The rise in tensions could bring an Iranian military response which, if seen, could slow global oil movements,” Dennis Kissler, senior vice president at BOK Financial, wrote in a note to clients on Monday.

    Read more here.

  • Gold climbs amid geopolitical tensions, expected rate cut

    Gold prices neared record highs on Monday as investors flocked toward the precious metal amid heightened geopolitical tensions and the expectation of a Fed rate cut in September.

    Gold futures (GC=F) for December delivery climbed above $2,552 per ounce.

    The precious metal is up more than 23% year to date, making it one of the best-performing commodities of the year.

  • Tech stocks lag as Nvidia, Broadcom, Tesla fall

    Tech stocks lagged on Monday, dragging on the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC).

    Shares of Nvidia (NVDA) fell more than 1.5% by 12:30 p.m. ET, though they were off their session lows. Semiconductor Broadcom (AVGO) dropped more than 3% while EV maker Tesla (TSLA) also fell more than 2%.

    Meanwhile, Materials (XLP), Utilities (XLU), and Energy (XLE) stocks gained, helping lift the Dow Jones Industrial Average (^DJI) higher.

    Tech lagged on Monday while Materials, Utilities and Energy stocks gained.Tech lagged on Monday while Materials, Utilities and Energy stocks gained.

    Tech lagged on Monday while Materials, Utilities and Energy stocks gained.

  • McLaren CEO looks to follow Ferrari’s blueprint for success — but with ‘no arrogance’

    Yahoo Finance’s Pras Subramanian reports:

    CARMEL, Calif. — McLaren CEO Michael Leiters believes that the British luxury supercar maker can succeed much like Ferrari has — but in a somewhat different way.

    “We have one element in our brand, and it’s belonging,” Leiters, who has been at the helm of McLaren for two years after eight years as Ferrari’s chief technology officer, said in an interview with Yahoo Finance during Monterey Car Week. “We want to have people here. … We speak with everybody — no arrogance.”

    That could be read as a not-so-veiled swipe at Ferrari, given that the Italian luxury sports car manufacturer is notorious for secrecy, invite-only events, and only selling new vehicles to current or favored customers.

    Read more here.

  • Dow jumps 200 points while Nasdaq falls, Nvidia declines 2%

    The markets diverged on Monday as the Dow Jones Industrial Average (^DJI) rose as much as over 200 points to touch a fresh intraday record.

    The S&P 500 (^GSPC) erased earlier gains to fall 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) dropped more than 1%, led by a fall in shares of Nvidia (NVDA).

    The AI chip heavyweight will report quarterly results this Wednesday after the market close.

    EV giant Tesla (TSLA) also fell more than 3%, weighing on the S&P 500 and Nasdaq.

  • Dow gains 200 points, touches intraday record

    The Dow Jones Industrial Average (^DJI) rose more than 200 points, or 0.5%, on Monday morning, touching a new intraday record of 41,394.10.

    Energy and Materials led the gains on Monday. Meanwhile, Technology stocks lagged, with the tech-heavy Nasdaq Composite (^IXIC) slipping as much as 0.7% while the S&P 500 (^GSPC) fell slightly.

  • S&P 500 inches toward record high

    The S&P 500 (^GSPC) rose 0.3% on Monday, inching closer to its July record highs. The index was less than 0.5% away from its July 16 all-time record close of 5,667.20.

    The Dow Jones Industrial Average (^DJI) rose 0.3% on Monday. The tech-heavy Nasdaq Composite (^IXIC) drifted just above the flat line after opening slightly lower.

  • Stocks open mixed as investors turn focus on Nvidia earnings this week

    Stocks traded mixed on Monday as investors turned their focus to a busy week spearheaded by Nvidia’s (NVDA) earnings report.

    The S&P 500 (^GSPC) rose roughly 0.1%, while the Dow Jones Industrial Average (^DJI) added roughly 0.2%. The tech-heavy Nasdaq Composite (^IXIC) slipped just below the flat line after the major indexes rallied on Friday.

    The focus this week is firmly on Nvidia earnings. A lot is riding on those results since the AI chip heavyweight has been a major driver of the markets this year. Nvidia stock was little changed on Monday morning following a 4.5% gain on Friday.

    Stocks neared fresh record highs on Friday after Fed Chair Jerome Powell made it crystal clear the central bank is ready to pivot to lowering rates in September. The benchmark S&P 500 index is less than 1% away from topping the all-time closing high set in July.

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