US STOCKS-Dow jumps amid broader market rally in countdown to inflation data
24/06/2024 19:25
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Fed's preferred inflation PCE data due on Friday
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Nvidia on track for third straight declining session
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Indexes: Dow up 0.58%, S&P down 0.13%, Nasdaq down 0.83%
(Updated at 2:03pm ET/1703 GMT)
By Ankika Biswas, Lisa Pauline Mattackal and Carolina Mandl
June 24 (Reuters) -
A broad stock market rally pushed the blue-chip Dow to a
one-month high on Monday, as investors rotated out of AI-linked
stocks and added some laggards to their portfolios, betting on
Federal Reserve interest rate cuts this year.
Nvidia NVDA.O slid for a third session, down 5.4% as
market watchers cited profit taking in the semiconductor
bellwether after its meteoric rise last week to the world's most
valuable company.
Other chip stocks including U.S. shares of Taiwan
Semiconductor Manufacturing TSM.N , Broadcom AVGO.O , Marvell
Technology MRVL.O and Qualcomm QCOM.O dropped between 2.1%
and 4%, dragging the chip stocks index .SOX down 2.3%.
"The market's selling some of the winners and buying
some of the laggards here," said Jack Janasiewicz, lead
strategist at Natixis Investment Managers. "It's a little bit of
a nod to looking out over the inflation data that is coming out
on Friday, as expectations are for a pretty soft print."
Technology .SPLRCT and the consumer discretionary were
the only two decliners among the 11 S&P 500 sector indexes.
Meanwhile, the energy sector was up 2.5%.
The Dow Jones Industrial Average .DJI jumped over 0.5%
intraday, on course for a five-day winning streak. The
small-caps index Russell 2000 .RUT also hit its highest in
over a week, signaling broader market gains.
"If inflation comes in softer, the market could broaden
out quite significantly... The breadth will get wider and
everything beyond the AI stocks," said Phil Blancato, CEO of
Ladenburg Thalmann Asset Management.
The biggest event on investors' radar for the week is
Friday's personal consumption expenditures (PCE) price index
report, the Fed's preferred measure of inflation, expected to
show a moderation in price pressures.
Investors still expect about two rate cuts this year,
pricing in a 61% chance of a 25-basis-point cut in September, as
per LSEG's FedWatch. The Fed's own latest projection is for one
rate cut likely in December.
At 02:03 p.m. the Dow rose 225.94 points, or 0.58%, to
39,376.27, the S&P 500 .SPX lost 6.84 points, or 0.13%, to
5,457.78 and the Nasdaq Composite .IXIC lost 147.38 points, or
0.83%, to 17,541.98.
Other data this week include durable goods, weekly jobless
claims and final first-quarter GDP figures, the annual Russell
index reconstitution. Some quarterly earnings reports also are
due.
On Thursday, President Joe Biden will debate Republican
rival Donald Trump in Atlanta, which could influence the outcome
of a race for the November election that opinion polls show as
neck-and-neck.
Meta Platforms META.O rose 0.23% after a report the
Facebook parent has discussed integrating its generative AI
model into Apple's AAPL.O recently announced AI system for
iPhones. Apple's shares also climbed 0.77%.
RXO RXO.N leapt over 21% on plans to buy United Parcel
Service's UPS.N Coyote Logistics business unit for $1.025
billion.
Advancing issues outnumbered decliners by a 2.27-to-1 ratio
on the NYSE. There were 141 new highs and 39 new lows on the
NYSE.
The S&P 500 posted 33 new 52-week highs and one new low
while the Nasdaq Composite recorded 41 new highs and 101 new
lows.
(Reporting by Ankika Biswas and Lisa Mattackal in Bengaluru,
and Carolina Mandl in New York; Editing by Maju Samuel and David
Gregorio)
((Ankika.Biswas@thomsonreuters.com;))