What’s going on here?
Nasdaq and S&P 500 achieved all-time closing highs for the fourth consecutive day on June 13, 2024. The Nasdaq Composite rose 0.3%, closing at 17,667.56 while the S&P 500 gained 0.23%, closing at 5,433.74. Meanwhile, the Dow Jones Industrial Average slipped 0.17%, ending at 38,647.1.
What does this mean?
The tech sector continues to fuel market momentum, with the S&P 500 technology sector surging 1.4% and the Semiconductors Index climbing 1.5% to an all-time high. Broadcom shares soared 12.3% after an upgraded forecast for AI-related semiconductor revenue and a 10-for-1 stock split, while Nvidia and Tesla shares rallied 3.5% and 2.9% respectively. Apple shares ended up 0.5%, and Adobe saw a 14% post-market jump due to its stellar second-quarter earnings. However, broader market concerns linger, with the Producer Price Index’s unexpected drop fueling speculation of a potential Fed rate cut. Unemployment claims reached a 10-month high, and consumer prices remained stagnant in May, raising fears of a possible economic slowdown.
Why should I care?
For markets: Tech stocks steal the show while broader markets struggle.
Tech giants like Broadcom and Nvidia are driving market highs, but the broader scene isn’t as rosy. The Dow dropped 0.17%, the Industrials sector fell 0.6%, and small-cap stocks took a 0.9% hit. Declining issues outnumbered advancing ones across NYSE and Nasdaq, and trading volume was below average. This contrast hints at underlying market fragility despite tech’s impressive performance.
The bigger picture: Economic slowdown fears amid interest rate uncertainty.
May’s unchanged consumer prices and increased unemployment claims are causing jitters about an economic downturn. The Producer Price Index’s unexpected drop has led to speculation about a Fed rate cut, though only one is projected for the year, down from three forecasted in March. These mixed signals are unsettling, indicating that while sectors like tech thrive, broader economic challenges loom.
