- Summary
- Companies
- Nvidia jumps on report of new AI chip for China market
- Mattel soars after Reuters reports buyer interest
- CrowdStrike slips after Friday’s global cyber outage
- Verizon falls on Q2 revenue miss
- Indexes rise: Dow 0.32%, S&P 1.08%, Nasdaq 1.58%
Wall Street’s three benchmarks ended higher on Monday as investors returned to megacap growth stocks, helping both the S&P 500 (.SPX), opens new tab and Nasdaq Composite (.IXIC)
, opens new tab recover from their worst weekly performance since April.
The Dow Jones Industrial Average (.DJI) , opens new tab was also back in positive territory, breaking a two-session skid since hitting an all-time closing high last Wednesday.
Megacaps Alphabet (GOOGL.O), opens new tab, Meta Platforms (META.O), opens new tab and Tesla (TSLA.O), opens new tab all advanced between 2.2% and 5.1% after being major drags on the market
Nvidia (NVDA.O), opens new tab also rose 4.8% after Reuters reported the artificial intelligence chip leader was working on a version of its new flagship AI chips for the China market that would be compliant with current U.S. export controls.
The Information Technology index (.SPLRCT) , opens new tab climbed 2%, topping sectoral gainers and snapping a four-day losing streak.
“We think this move today probably has more to do with a rebound from the selling that occurred last week than anything else,” said Jason Pride, chief of investment strategy & research at Glenmede.
Chief among the other factors on traders’ minds was a reexamination of the state of the presidential race after U.S. President Joe Biden announced his withdrawal and endorsed Vice President Kamala Harris’ candidacy for the November election on Sunday.
Biden’s exit could prompt investors to unwind trades on bets that a victory for Republican Trump would increase U.S. fiscal and inflationary pressures. But some analysts said markets could benefit from an increased chance of a divided government under the next administration.
Online betting site PredictIt showed pricing for a Donald Trump victory slipped 4 cents to 60 cents, while climbing 12 cents for a Harris win to 39 cents.
Trump-linked stocks were mixed on Monday, with Trump Media & Technology Group (DJT.O)
, opens new tab dropping 0.8%, while software firm Phunware (PHUN.O) , opens new tab gained 4%.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., June 12, 2024.
Having digested the news of Biden’s withdrawal, investors will now be looking for answers to key questions including who will join Harris on the Democratic presidential ticket and to what degree, if any, the vice president will deviate from the platform which Biden was headlining.
This element of uncertainty is present alongside traders’ angst over quarterly earnings, including from two of the so-called Magnificent Seven companies – Alphabet and Tesla – on deck this week.
The results will test whether the recent rally in top-tier high-momentum stocks is tenable and if a move to underperforming sectors will continue.
“We’re seeing the market begin to price in a little bit a faster set of rate cuts, and that is leading to a bit of a shift in leadership to favor smaller-cap stocks and to deviate from the focus on the largest tech companies,” said Glenmede’s Pride.
“Obviously today looks a little bit different to that, but it’s still a trend in the background.”
The S&P 500 (.SPX), opens new tab gained 59.41 points, or 1.08%, at 5,564.41 points, while the Nasdaq Composite (.IXIC), opens new tab climbed 280.63 points, or 1.58%, to 18,007.57. The Dow Jones Industrial Average (.DJI), opens new tab rose 127.91 points, or 0.32%, to 40,415.44.
Cybersecurity firm CrowdStrike (CRWD.O), opens new tab slumped 13.5%, extending losses after a software update from the company sparked Friday’s global tech outage.
Delta Air Lines (DAL.N), opens new tab dropped 3.5% after canceling over 600 flights as it struggled to restore operations after the outage.
Verizon Communications (VZ.N) , opens new tab fell 6.1% after a second-quarter revenue miss.
Mattel Inc (MAT.O), opens new tab jumped 15.1% after Reuters reported the toy maker had been approached by buyout firm L Catterton with an acquisition offer. Volume on U.S. exchanges was 10.95 billion shares, compared with the 11.37 billion average for the full session over the last 20 trading days
