U.S. stocks wavered on Monday ahead of an important week that could provide key signals on the near-term path of interest rates.
The S&P 500 Index (GSPC) flattened, while the tech-heavy Nasdaq Composite (IXIC) edged up 0.1% after each index hit its latest record high Friday. The Dow Jones Industrial Average (DJI) erased the previous session’s gains to decline 0.2%.
The S&P and Nasdaq are looking to consolidate records set after Friday’s jobs report, which signaled a continued slowdown in the labor market. That has sparked a surge in bets that the Federal Reserve will cut rates in September. About 3 in 4 traders expect a rate cut in September, according to the CME’s FedWatch tool.
Several events this week could reinforce this growing momentum toward lower rates. Fed Chairman Jerome Powell is scheduled to appear before Congress for semiannual testimony on Tuesday and Wednesday. Then comes the latest consumer price index reading, which is scheduled to be released on Thursday. Economists expect headline inflation to have risen 3.1% over the past year, matching the lows the CPI reached earlier this year.
Among other market-moving events, France’s left-wing coalition won the most votes in the parliamentary elections, surprising the far-right, which had hoped to secure a parliamentary majority. The French benchmark index (^FHCI) edged higher.
On the corporate front, Boeing (BA) pleaded guilty to a criminal conspiracy charge in connection with two fatal 737 Max crashes. Shares rose nearly 1% during the session.
Meanwhile, Tesla (TSLA) stock erased early trading losses to turn positive, with shares of the electric vehicle giant on track to extend an eight-day winning streak.
Live9 updates
Chip stocks outperform, boost Nasdaq
Chip stocks outperformed during Monday’s session, with the iShares Semiconductor ETF (SOXX) gaining more than 1.5%.
Among the biggest gainers: Nvidia (NVDA) rose 2%, AMD (AMD) climbed 3% and Intel (INTC) rose about 5%.
Chipmakers also helped the Nasdaq Composite (^IXIC) stay in positive territory Monday afternoon, while the Dow Jones Industrial Average (^DJI) fell slightly and the S&P 500 (^GSPC) hovered near a flat line.
Bitcoin hovers around $56,000
Bitcoin (BTC-USD) was hovering around $56,000 per token Monday afternoon after the cryptocurrency saw a decline over the past week on fears of selling as defunct cryptocurrency exchange Mt. Gox began repaying its creditors.
The German government’s massive Bitcoin selloff may have also put downward pressure on bitcoin.
The digital token has fallen as much as 5% in the past 24 hours to just under $55,000, about $19,000 below its March record high.
Paramount stock drops after company agrees to merge with Skydance
Yahoo Finance’s Alexandra Canal reports:
Paramount (PARA) shares fell Monday after the entertainment giant announced plans to merge with Skydance Media in a deal that would mark the end of the Redstone family’s control of the company.
The deal, announced Sunday night, comes after years of speculation surrounding Paramount, which is controlled by Shari Redstone through her family’s holding company, National Amusements (NAI).
Paramount shares fell about 3% in midday trading the next day as investors digested the terms of the new deal, which calls for Skydance to first acquire NAI (and Redstone’s stake) for $2.4 billion in cash before finalizing a full merger.
National Amusements owns approximately 10% of Paramount’s equity value and retains 77% of the voting stock, valued at approximately $1 billion.
Read more here.
Dow Loses Steam, S&P 500 Wobblies
Stocks lost steam in mid-session trading Monday, with the S&P 500 (^GSPC) falling just below the flat line.
The Dow Jones Industrial Average (^DJI) lost more than 200 points to fall nearly 0.2%.
Semiconductor stocks helped the Nasdaq Composite (^IXIC) hold on to modest gains. Shares of Nvidia (NVDA), Broadcom (AVGO) and Intel (INTC) all rose more than 2% on Monday.
Nvidia jumps 2% after analysts raise price target on stock
Shares of Nidia (NVDA) jumped more than 2% on Monday as some Wall Street analysts raised their price targets on the AI chip heavyweight.
UBS raised its price target for the stock to $150 from $120, while Wolfe Research raised its price forecast to $150 from $125.
Nvidia is up nearly 160% since the start of the year. Shares of the Santa Clara, California-based company closed at a record high of $135.58 each on June 18.
Tesla stock tries to extend its 8-day monster rally
Tesla (TSLA) stock moved into green territory after opening in the red as the electric vehicle giant attempted to extend an eight-day rally in which shares climbed about 37%.
The stock’s winning streak has erased losses from the current year in a remarkably quick turnaround. Shares have gained more than 75% since 52-week lows hit in April.
Tesla stock was just above the flat line as of 10:45 a.m. ET.
Dow Jones gains 200 points on the rise of Intel and Boeing shares
The Dow Jones Industrial Average (DJI) gained more than 200 points, or 0.6%, on Monday. The flagship index was supported by shares of Intel (INTC) and Boeing (BA), up more than 5% and 2%, respectively.
Boeing shares rose after the planemaker pleaded guilty to a criminal conspiracy charge in connection with two fatal 737 Max crashes.
Intel shares also soared after Melius Research noted that the chipmaker is likely to benefit from enthusiasm for AI in the second half of this year as investors turn to tech names that have underperformed the semiconductor sector.
Intel shares have fallen more than 30% since the start of the year.
Stocks advance ahead of key inflation data this week, S&P 500, Nasdaq aim to consolidate records
Stocks were higher Monday, with the S&P 500 (^GSPC) up 0.1%. The tech-heavy Nasdaq Composite (^IXIC) edged just above the flat line after each index posted record closes Friday.
The Dow Jones Industrial Average (^DJI) rose about 0.2%.
Stocks are looking to build on records set following Friday’s jobs report, which signaled a continued slowdown in the labor market.
Other key data will be released this week, including the consumer price index which is expected to be released on Thursday.
“We expect the June CPI to be a weak report, which will reinforce the Fed’s confidence in disinflation,” BofA Global Research analysts wrote Monday.
Markets will also be watching for any clues about the central bank’s next move when Fed Chairman Jerome Powell speaks Tuesday and Wednesday in semiannual testimony before Congress.
Watch Disney
Keep an eye on Disney (DIS) shares this morning after big increases in JPMorgan estimates.
Analyst David Karnovsky raised his estimate for Disney’s full-year operating profit to 20.5% growth from a year earlier. He expects earnings per share to rise 25%.
“Our higher estimate follows the strong box office performance of Inside Out 2, which grossed over $1 billion worldwide during the quarter. The film is a positive indicator of the studio’s creative direction – particularly with a number of animated sequels in the works – although we believe investors still want to see execution of the original IP,” Karnovsky said.
Note: Disney shares have fallen 16% over the past three months.
