Nasdaq Hits Record, Fed’s Kashkari Seeks More Inflation Data, GameStop Soars

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open informs investors about everything they need to know, wherever they are. Like what you see? You can subscribe here.

Nasdaq hits record high
The Nasdaq Composite closed above 17,000 for the first time, driven by a rise in Nvidia shares, on an otherwise lackluster day for the market. The S&P 500 edged up 0.02%. The Dow Jones Industrial Average fell more than 200 points after hawkish comments from Minneapolis Federal Reserve President Neel Kashkari. The yield on the 10-year Treasury note rose following a $70 billion auction of 5-year Treasury notes by the Treasury Department, which was met with weak demand. Oil prices rose 3% ahead of an OPEC+ meeting scheduled for Sunday.

Fed’s Kashkari wants more inflation data
The Federal Reserve should wait for significant progress on inflation before cutting interest rates, Kashkari told CNBC on Tuesday. Asked about the conditions needed for a rate cut this year, Kashkari said: “I think we need several more months of positive inflation data to give me confidence that it is appropriate to roll back.” » He stressed that the central bank could even consider rate hikes if inflation does not ease. “I don’t think we should rule anything out at this point,” he added.

American Airlines reduces its outlook
Shares of American Airlines fell more than 8% in extended trading after the company lowered its second-quarter sales outlook. The airline also announced that its chief commercial officer, Vasu Raja, will leave the company next month. Raja was on leave recently and a spokeswoman for the carrier said last week he would not be leaving. That changed after internal discussions in recent days, according to a person familiar with the matter.

GameStop soars
Shares of GameStop jumped more than 20% after the video game retailer announced it raised $933 million through a stock offering. Plans to sell shares were announced earlier this month amid a resurgence in the meme stock craze. This follows a social media post from “Roaring Kitty,” an account associated with the 2021 GameStop short squeeze, which had been inactive for nearly three years.

Asia-Pacific markets mostly down
Australia’s S&P/ASX 200 index fell 1.2% following stronger-than-expected inflation data for April, suggesting the central bank may not cut interest rates this year. Japan’s Nikkei 225, Korea’s Kospi and Hong Kong’s Hang Seng were all lower. Mainland China’s CSI 300 index rose 0.38% after the International Monetary Fund raised the country’s growth forecast to 5% this year, from 4.6% due to “strong” figures in the first quarter and recent political measures.

(PRO) Riding the AI ​​boom
CNBC’s Todd Gordon analyzes a cybersecurity company that could benefit from investor enthusiasm for artificial intelligence stocks. One analyst predicts that the company’s market capitalization could increase by $25 billion.

Texas Instruments has become the latest company targeted by activist investor Elliott, who has taken a $2.5 billion stake in the chipmaker. Elliott is pushing for changes to the way Texas Instruments manages its free cash flow.

Activism has long been an integral part of Wall Street’s arsenal to bring about change in corporate decision-making. In one early example, Benjamin Graham successfully pressured Northern Pipeline, a subsidiary of Standard Oil, to return money to shareholders in the 1920s. Another oil company is now under fire for its response to activism.

ExxonMobil faces accusations of “bullying” and “schoolyard harassment” from the $484 billion California Public Employees Retirement System (CalPERS). This confrontation culminates today at Exxon’s shareholder meeting, where CalPERS publicly announced its intention to vote against all 12 Exxon board nominees and against CEO Darren Woods. CalPERS is not alone in expressing its displeasure with the oil giant.

Exxon’s troubles began when it filed a lawsuit against two activist investors, Arjuna Capital and Follow This, who had submitted a shareholder proposal calling for tougher emissions targets. Despite withdrawing the proposal after filing a lawsuit, Exxon persisted with its lawsuit, telling the Financial Times that climate activists intended to “financially harm” the company. In a statement to CNBC, Exxon claimed that Arjuna and Follow This were attempting to “silence the voices of up to 90% of our voting shareholders who rejected the proposal twice.”

CalPERS, which owns a billion-dollar stake in Exxon, says Exxon could have sought relief from the Securities and Exchange Commission, which has approved two-thirds of similar claims. The pension fund further claims that the lawsuit could have devastating consequences for shareholder rights.

“If ExxonMobil succeeds in silencing voices and upending the rules of shareholder democracy, what other issues will company leaders put out of reach?” CalPERS CEO Marcie Frost and board chair Theresa Taylor said in an open letter. “Worker safety? Excessive executive pay?”

CalPERS called the lawsuit reckless and urged administrators to stop CEO Woods from continuing this “destructive effort.” They also called on other shareholders to join them in “sending the message that our voices will not be silenced”.

— CNBC’s Rohan Goswami, Alex Harring, Pia Singh, Leslie Josephs, Jenni Reid, Spencer Kimball, MacKenzie Sigalos, Todd Haselton, Sean Conlon and Sophie Kinderlin contributed to this report.