US STOCKS-S&P 500, Nasdaq ride AI wave to end at record highs; Dow flat on weak retail sales
18/06/2024 21:01
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U.S. retail sales rise less than expected in May
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Lennar drops as home delivery forecast disappoints
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Citigroup hikes S&P 500 year-end target to 5,600 points
(Updates to 4:00 p.m. EDT)
By Echo Wang
June 18 (Reuters) -
The S&P 500 and Nasdaq closed at record highs on Tuesday as
Nvidia extended its surge to new peaks, while the Dow was barely
changed in pre-holiday trading following softer-than-expected
U.S. retail sales data.
Nvidia NVDA.O overtook Microsoft MSFT.O to become the
world's most valuable company.
Other chip stocks, including Qualcomm QCOM.O , Arm Holdings
ARM.O and Micron MU.O , also extended their recent rallies,
boosting the Philadelphia SE Semiconductor index .SOX to a
record high.
"It's really the AI story," said Ty Draper, financial
advisor at Beacon Capital Management in Franklin, Tennessee.
The Nasdaq notched a seventh record closing high in a row,
with gains in many chip stocks despite losses in Alphabet
GOOGL.O , Amazon AMZN.O and Meta Platforms META.O .
Retail sales rose 0.1% in May, versus the 0.3% growth
forecast by economists polled by Reuters, while another report
showed surprisingly strong May industrial production and
manufacturing output.
Following the news, markets slightly increased bets on two
Federal Reserve interest rate cuts this year, LSEG's FedWatch
showed, despite U.S. central bankers' most recent projections
for just one easing.
Technology .SPLRCT was the top S&P 500 sector gainer,
while communication services .SPLRCL led declines.
Investors focused on Fed officials' comments on Tuesday. New
York Fed President John Williams said rates will come down
gradually over time, while Richmond Fed's Thomas Barkin said he
required more months of economic data before supporting a rate
cut.
Some market observers noted nothing surprising emerged.
"That's why the markets stay unchanged today," said Jim Awad,
senior managing director at Clearstead Advisors LLC in New York.
U.S. markets will be closed on Wednesday for the Juneteenth
holiday.
Hopes for multiple rate cuts this year, excitement for
AI-related companies and robust earnings from other tech firms
have bolstered equities in recent months, with gains
concentrated in a few heavily weighted stocks.
Citigroup raised the year-end target for the S&P 500 .SPX
to 5,600 points from 5,100.
According to preliminary data, the S&P 500
.SPX gained 14.23 points, or 0.25%, to end at 5,487.46 points,
while the Nasdaq Composite .IXIC gained 9.09 points, or 0.05%,
to 17,862.23. The Dow Jones Industrial Average .DJI rose 54.07
points, or 0.15%, to 38,832.17.
Shares of education technology provider Chegg CHGG.N rose
after announcing job cuts in a restructuring.
Homebuilder Lennar LEN.N fell after forecasting
lower-than-expected third-quarter home deliveries.
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Tech stocks power Wall Street gains https://tmsnrt.rs/4b2zugY
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(Reporting by Echo Wang in New York; Additional reporting by
Lisa Mattackal and Ankika Biswas in Bengaluru; Editing by
Shounak Dasgupta, Maju Samuel and Richard Chang)
((e.wang@thomsonreuters.com))