S&P 500, Nasdaq hit new records with Powell at their side
U.S. stocks advanced Monday to begin an important week that could provide key signals for the near-term path of interest rates.
The S&P 500 (GSPC) rose 0.1% and the tech-heavy Nasdaq Composite (IXIC) climbed 0.3%, with both indexes managing to set new records. The Dow Jones Industrial Average (DJI) erased the previous session's gains to decline 0.1%.
The S&P and Nasdaq added points to Friday's record highs on the back of the jobs report, which signaled a continued slowdown in the labor market. That prompted a flood of bets on a September rate cut by the Federal Reserve. About 3 in 4 traders expect a September rate cut, according to the CME FedWatch tool.
This week’s events could reinforce that growing momentum for rate cuts. Fed Chairman Jerome Powell is scheduled to appear before Congress for semiannual testimony on Tuesday and Wednesday. Then comes the latest consumer price index number, which is scheduled to be released on Thursday. Economists expect headline inflation to have risen 3.1% over the past year, matching the lows the CPI reached earlier this year.
On the corporate front, Boeing (BA) pleaded guilty to a criminal conspiracy charge in connection with two fatal 737 Max crashes. Shares rose less than 1%.
Meanwhile, Tesla (TSLA) shares erased early losses to turn positive as the electric vehicle giant recorded its ninth straight day of gains. The stock closed up 0.5%.
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S&P 500 and Nasdaq hit new records
The S&P 500 and Nasdaq Composite managed to edge higher to close at new records on Monday as investors await a key inflation figure this week and earnings season kicks off again with JPMorgan Chase & Co. (JPM) and Wells Fargo (WFC) reporting quarterly results on Friday.
The Nasdaq Composite Index (IXIC) rose nearly 0.3% after hitting an all-time high last Friday. The S&P 500 (GSPC) also climbed 0.1% while the Dow Jones Industrial Average (DJI) fell just below the flat line.
Chip stocks outperformed during Monday's session, with Nvidia (NVDA), AMD (AMD) and Intel (INTC) all closing higher.
The consumer price index is due to be released on Thursday before the market opens.
“We expect the June CPI to be a weak report, which will reinforce the Fed’s confidence in disinflation,” BofA Global Research analysts wrote Monday.
Monday Trends
Boeing (Licence)
The planemaker plans to plead guilty to fraud charges related to the deadly 737 Max crashes in 2018 and 2019. Boeing shares rose as much as 2% Monday before paring gains.
Nicolas (NKLA)
Nikola took second place on Yahoo Finance's Hottest Stocks ranking on Monday, with the stock gaining more than 20%. The stock has gained more than 35% over the past five sessions.
Last Tuesday, stocks soared after the launch of the electric utility vehicle announcement he sold wholesale 72 Nikola Class 8 Hydrogen Fuel Cell Trucksabove the upper limit of the truck sales forecast of 60 units.
Super Micro Computer (SMCI)
AI-related stocks like Super Micro Computer rose Monday as the chip sector outperformed. SMCI gained 7% during the session. The stock is up more than 215% year to date.
Chip stocks outperform, boost Nasdaq
Chip stocks outperformed during Monday's session, with the iShares Semiconductor ETF (SOXX) gaining more than 1.5%.
Among the biggest gainers, Nvidia (NVDA) rose 2%, AMD (AMD) climbed 3% and Intel (INTC) rose about 5%.
Chipmakers also helped the Nasdaq Composite (^IXIC) stay in positive territory Monday afternoon, while the Dow Jones Industrial Average (^DJI) fell slightly and the S&P 500 (^GSPC) hovered near a flat line.
Bitcoin hovers around $56,000
Bitcoin (BTC-USD) was hovering around $56,000 per token Monday afternoon after the cryptocurrency saw a decline over the past week on fears of selling as defunct cryptocurrency exchange Mt. Gox began repaying its creditors.
The German government's massive sale of bitcoins in one go may have also put downward pressure on bitcoin.
The digital token has fallen as much as 5% in the past 24 hours to just under $55,000, about $19,000 below its March record high.
Paramount stock drops after company agrees to merge with Skydance
Yahoo Finance's Alexandra Canal reports:
Paramount (PARA) stock fell Monday after the entertainment giant announced it plans to merge with Skydance Media in a deal that would mark the end of the Redstone family's control of the company.
The deal, announced Sunday night, comes after years of speculation surrounding Paramount, which is controlled by Shari Redstone through her family's holding company, National Amusements (NAI).
Paramount shares fell about 3% in midday trading the next day as investors digested the terms of the new deal, which calls for Skydance to first acquire NAI (and Redstone's stake) for $2.4 billion in cash before finalizing a full merger.
National Amusements owns approximately 10% of Paramount's equity value and retains 77% of the voting stock, valued at approximately $1 billion.
Read more here.
Dow Loses Steam, S&P 500 Wobblies
Stocks lost steam in mid-session trading Monday, with the S&P 500 (^GSPC) falling just below the flat line.
The Dow Jones Industrial Average (^DJI) lost more than 200 points to fall nearly 0.2%.
Semiconductor stocks helped the Nasdaq Composite (^IXIC) hold on to modest gains. Shares of Nvidia (NVDA), Broadcom (AVGO) and Intel (INTC) all rose more than 2% on Monday.
Nvidia jumps 2% as analysts raise price target on stock
Shares of Nvidia (NVDA) jumped more than 2% Monday as some Wall Street analysts raised their price targets on the AI chip heavyweight.
UBS raised its price target for the stock from $120 to $150, while Wolfe Research raised its price forecast from $125 to $150.
Nvidia is up nearly 160% since the start of the year. Shares of the Santa Clara, California-based company closed at a record high of $135.58 each on June 18.
Tesla stock tries to extend its 8-day monster rally
Tesla (TSLA) stock moved into green territory after opening in the red as the electric vehicle giant attempted to extend an eight-day rally in which shares climbed about 37%.
The stock's winning streak has erased losses from the current year in a remarkably quick turnaround. Shares have gained more than 75% since 52-week lows hit in April.
Tesla stock was just above the flat line as of 10:45 a.m. ET.
Dow Jones gains 200 points on the rise of Intel and Boeing shares
The Dow Jones Industrial Average (DJI) gained more than 200 points, or 0.6%, on Monday. The flagship index was supported by shares of Intel (INTC) and Boeing (BA), up more than 5% and 2%, respectively.
Boeing shares rose after the planemaker pleaded guilty to a criminal conspiracy charge in connection with two fatal 737 Max crashes.
Intel shares also soared after Melius Research noted that the chipmaker is likely to benefit from enthusiasm for AI in the second half of this year as investors turn to tech names that have underperformed the semiconductor sector.
Intel shares have fallen more than 30% since the start of the year.
Stocks advance ahead of key inflation data this week, S&P 500, Nasdaq aim to consolidate records
Stocks were higher Monday, with the S&P 500 (^GSPC) up 0.1%. The tech-heavy Nasdaq Composite (^IXIC) edged just above the flat line after each index posted record closes Friday.
The Dow Jones Industrial Average (^DJI) rose about 0.2%.
Stocks are looking to build on records set following Friday's jobs report, which signaled a continued slowdown in the labor market.
Other key data will be released this week, including the consumer price index which is expected to be released on Thursday.
“We expect the June CPI to be a weak report, which will reinforce the Fed’s confidence in disinflation,” BofA Global Research analysts wrote Monday.
Markets will also be watching for any clues about the central bank's next move when Fed Chairman Jerome Powell speaks Tuesday and Wednesday in semiannual testimony before Congress.
Watch Disney
Keep an eye on Disney (DIS) shares this morning after big increases in estimates from JPMorgan.
Analyst David Karnovsky raised his full-year operating profit estimate for Disney to 20.5% growth from a year earlier. He expects earnings per share to rise 25%.
“Our higher estimate follows the strong box office performance of Inside Out 2, which grossed over $1 billion worldwide during the quarter. The film is a positive indicator of the studio’s creative direction, particularly with a number of animated sequels in the works, although we believe investors still want to see execution of the original IP,” Karnovsky said.
Note: Disney shares have fallen 16% over the past three months.
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