June 25, 2024

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Nvidia is catching its breath as the S&P 500 and Nasdaq continue to near record highs

Nvidia is catching its breath as the S&P 500 and Nasdaq continue to near record highs

US stocks were little changed on Thursday after a profitable session fueled by Big Tech companies, as investors weighed new labor data amid rising hopes for an interest rate cut.

The S&P 500 (^GSPC) was hovering near the flat line in the wake of a record close. The Dow Jones Industrial Average (^DJI) rose 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) gave up early session gains to fall slightly below the flat line.

Stocks stabilized after a massive rally that also lifted the Nasdaq to an all-time high on Wednesday. Technology stocks helped drive gains, with Nvidia (NVDA) surpassing Apple (AAPL) as the second-largest US company with their market caps exceeding $3 trillion.

Nvidia gave back early session gains to fall below the flat line at 10 a.m. ET. Other big tech held steady, with Apple and Meta (META) little changed.

Meanwhile, Treasury yields rebounded from declines that fueled a rally in stocks. The benchmark 10-year yield (^TNX) rose to about 4.30%, moving away from the lowest level since March reached on Wednesday.

The market greeted the recent weak economic readings as a reason to bring the Federal Reserve’s policy pivot back to the table, with the US private sector employment report failing to have the latest sign of a slowing labor market. Traders now see a 69% chance of a rate cut in September, versus about 50% a week ago, according to the European Central Bank report. CME FedWatch tool.

Across the pond, the European Central Bank cut interest rates by 25 basis points on Thursday for the first time since 2019, in a widely expected move.

Read more: How does the labor market affect inflation?

Weekly US unemployment claims released Thursday morning reached 229,000 versus the 220,000 that economists had expected. The data gives investors another clue as to whether the Fed will achieve the desired soft landing for the economy. But the countdown began for the monthly May jobs report on Friday, which is seen as pivotal for stocks.

In individual movers, Lululemon ( LULU ) shares rose 4% after the athletic apparel maker boosted earnings expectations and a stock buyback program.

He lives7 updates

  • Oil rises as the European Central Bank cuts interest rates, and Saudi Arabia signals flexibility on phasing out production cuts

    Oil prices rose on Thursday after the European Central Bank cut its key interest rate and Saudi Arabia, OPEC’s largest producer, signaled it still prioritizes price stability, suggesting it may change an earlier decision to phase out some voluntary cuts starting this year.

    West Texas Intermediate crude futures (CL=F) rose 0.8%, while Brent crude (BZ=F), the international benchmark price, also rose 1%.

    The price of crude oil fell earlier this week following the oil alliance’s decision to keep most production cuts in place, but began phasing out voluntary cuts starting in October. The market widely expected all cuts to remain in place until 2024.

    The European Central Bank on Thursday cut its key interest rate by 25 basis points for the first time since 2019, in a move that was widely expected.

    Low interest rates tend to stimulate economic activity, which increases demand for oil and gas.

  • Nvidia reverses its previous gains and falls into negative territory

    Nvidia (NVDA) shares fell into negative territory after a 2.6% gain in early trading.

    The stock reached an all-time high of $1,255.87 shortly after the market opened, but then fell as much as 3% by 10 a.m. ET.

    Nvidia’s decline sent the Nasdaq Composite into negative territory

  • Stocks flat as Nvidia rises

    U.S. stocks were little changed Thursday morning after a technology-fueled rally that sent the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) to record highs.

    Nvidia (NVDA) opened slightly higher after the AI ​​darling company surpassed the $3 trillion market cap mark in the previous session.

    On Thursday morning, the S&P 500 and Dow Jones Industrial Average (^DJI) hovered around the flat line. The Nasdaq index rose by about 0.1%.

    Investors are keeping their eyes on the upcoming jobs report that will be released on Friday morning.

  • The business PC market is rebounding

    Two are a trend in my books.

    Recent findings from major PC manufacturers point to a long-awaited recovery in the business PC market.

    Loop Capital’s John Donovan came out with a note this morning offering more information about the emerging trend:

    “The deeper we delve into the sector, the news and updates frankly become increasingly exciting. All the ingredients are in place for a long and extended update cycle. Among the inputs is finalizing the return-to-work principles, which is a drawn-out process and the lack of upgrades since the pandemic (this also impacts On the consumer side to some extent), and the revamp of Windows 10-11 – this is leading to growing optimism, add to that the simple fact that AI solutions for PC will undoubtedly deliver higher results for service providers, especially on the business side of the book. Professor, the optimism seems realistic. Keep in mind that upgrading companies cannot simply take the “cheap route” because AI innovations would make “good enough solutions” obsolete, so we see a roadmap to get to the level. Overbought” In the near future, more good news for PC manufacturers.

    Here’s what the CEO of HP Inc. told me. (HPQ) Enrique Lloris on this bounce.

  • A new face on Walmart’s plate

    A meaningful new side quest for one of the fast food industry’s most famous CEOs.

    Chipotle (CMG) CEO Brian Nichol has been officially elected as a director of the Walmart (WMT) board of directors. He is now the fifth new independent director Walmart has brought on board since 2017, CEO Doug McMillon said Wednesday morning before the shareholder vote.

    Nicol replaces longtime board member Rob Walton (son of Walmart founder Sam Walton), who retired effective Wednesday.

    This isn’t Nicole’s first rodeo as a board member outside Chipotle’s borders. He previously served on the boards of KB Home (KBH) and Harley-Davidson (HOG).

    Nicole’s addition makes a lot of sense.

    Both Chipotle and Walmart have seen success in recent years as value-conscious consumers look for items they believe will allow them to stretch their money. Nicol also led digital ordering at Chipotle, while McMillon led a digital renaissance at Walmart.

    While other food chains struggled to keep traffic up last quarter, Chipotle saw same-store sales jump 7%, thanks in part to Nicole’s efforts.

    Similar atmosphere at Walmart: U.S. same-store sales rose 3.9% year over year.

    The burrito chain’s shares are up nearly 38% year to date, while Walmart’s shares are up more than 26%. It’s also worth noting that Walmart recently split its stock 3-for-1, while Chipotle is awaiting shareholder approval for its 50-for-1 split.

  • Hey, before you get too excited about this Lululemon neighborhood

    Bears raided Lululemon ( LULU ) stock ahead of its earnings report last night, so getting a 9% pre-market rally on results wasn’t that brutal.

    But this was not a typical Lululemon quarter (strong double-digit growth in every division) by any means, and the positive reaction may have been overdone.

    Worryingly, comparable sales in the Americas division were unchanged compared to the previous year. The company called customers color, which is usually not a good sign for future demand. (I was covering the stock as an analyst — believe me, that’s not a good sign.)

    “We advise investors to be sellers on any strength, as the Lululemon brand and its fundamentals have peaked, in our view, and we expect fierce competition ahead,” Jefferies analyst Randall Konick said in a note to clients this morning.

    Connick reiterated his underperform rating on the stock.

    Makes a lot of sense.

  • It is good to learn artificial intelligence terminology

    If you’re going to invest in AI, it’s a good idea to understand the language used.

    And that includes yours truly, who is not invested in AI but writes a lot more about it than I thought I would a decade ago.

    A helpful look at the topic of “liquid cooling” below in my conversation with HPE (HPE) CEO Antonio Neri on Yahoo Finance Live. I think you’ll hear more about this, given the power generated by new AI chips.

    I also found what Neri had to say about Nvidia (NVDA) interesting.