What's going on?
The Nasdaq and S&P 500 closed at all-time highs for the fourth consecutive day on June 13, 2024. The Nasdaq Composite rose 0.3% to close at 17,667.56, while the S&P 500 rose 0.23% to close at 5,433.74, while the Dow Jones Industrial Average fell 0.17% to close at 38,647.1.
What does this mean?
The technology sector continues to drive market momentum, with the S&P 500 Technology Sector surging 1.4% and the Semiconductor Index rising 1.5% to a new all-time high. Broadcom shares surged 12.3% on an upward revision of AI-related semiconductor sales guidance and a 10-for-1 stock split, while Nvidia and Tesla shares rose 3.5% and 2.9%, respectively. Apple shares rose 0.5%, and Adobe rose 14% after the close on strong second-quarter results. However, concerns remain across the market, with an unexpected decline in the producer price index signaling a possible Fed rate cut. Unemployment claims hit a 10-month high and consumer prices remained stagnant in May, raising concerns about a possible economic slowdown.
Why should you care?
About the market: While tech stocks are getting all the attention, the overall market is struggling.
While tech giants like Broadcom and Nvidia are driving the market higher, the overall picture is not so rosy. The Dow Jones Industrial Average fell 0.17%, the industrials sector lost 0.6%, and small caps fell 0.9%. Declining stocks outnumbered gainers on the NYSE and Nasdaq, and trading volume was below average. This contrast suggests underlying fragility in the market, despite the strength of tech companies.
The bigger picture: Concerns about economic slowdown amid interest rate uncertainty.
Unchanged consumer prices and a rise in jobless claims in May have stoked fears of a recession. An unexpected decline in the producer price index has fueled speculation that the Fed will cut interest rates once this year, down from three expected in March. The mixed signals are stoking fears and point to broader economic challenges looming while sectors like technology are doing well.
