The Dow Jones Industrial Average closed higher even as Apple fell after CEO Tim Cook announced an AI offering. Nvidia reversed higher after its 10-for-1 stock split took effect while GameStop plunged. Tesla fell after some warnings were issued on the pay package of CEO Elon Musk.
The Dow Jones index closed 0.2% higher after fighting its way out of the red. The Nasdaq composite rose nearly 0.4%.
Inside The S&P 500: Southwest Airlines Stock Soars On Elliott Move
Meanwhile, the S&P 500 climbed 0.3%. In the S&P, Southwest Airlines soared 7%. Activist fund Elliott Investment Management has taken a $1.9 billion stake in the airline and is trying to oust CEO Bob Jordan and Chair Gary Kelly.
Meanwhile Huntington Bancshares lagged due to a decline of 6% after the firm issued fresh full-year guidance that spooked investors. The bank closed further below its 50-day moving average.
The S&P 500 sectors closed mixed, with a bias to upside, on the stock market today. Energy and utilities were the strongest areas while consumer staples and financials lagged.
Small caps fought off an early bear attack, with the Russell 2000 rising 0.2%. The Innovator IBD 50 exchange traded fund reversed higher as well, popping more than 2% on the stock market today.
Stock Market Today: Bearish Calls On Elon Musk Pay Package
One of the big stories of the moment is whether shareholders will approve Tesla CEO Elon Musk's mammoth pay package this week.
Votes on two proposals will be announced at the firm's annual shareholders meeting Thursday. One is whether a package of 303 million split-adjusted stock options for Musk has once again been approved. The value of these options has fallen since a Delaware judge ruled in January that Musk was not entitled to the compensation package. The second measure is whether shareholders want to move the firm from Delaware to Texas.
Bernstein analyst Toni Sacconaghi reiterated Tesla as underperform today and believes Musk will not get his pay package approved. He said the stock "would likely be down (potentially 5%+)" due to fears the chief executive may choose to leave the company without the package.
Adding more fuel to the fire, CalSTRS Chief Investment Officer Chris Ailman appeared on CNBC to lambast the pay package. He said the fund, which is a long-term investor in Tesla stock, opposed the package before and will do so again.
Tesla stock ended the session down 2.1% on the stock market today. The stock is down around 30% so far this year.
Updated 2:59 p.m. ET
GameStop Plunges; General Motors Clears Entry
GameStop was continuing to plunge Monday after Friday's painful drawdown. The stock has now fallen more than 60% from its recent high of 64.83, a warning to investors about the dangers of jumping on the meme-stock bandwagon. Nevertheless, GME remains above the 50-day line, MarketSurge analysis shows.
And General Motors has broken out from a first-stage flat base with an ideal entry point of 46.16. It holds a decent, but not ideal, IBD Composite Rating of 87. GM is rallying amid enthusiasm over its electric-vehicle offerings. It has partnered with Costco Wholesale to boost sales.
Nvidia Reverses Higher After 10-for-1 Stock Split
Nvidia stock rallied out of negative territory to rise nearly 1% as the firm's 10-to-1 stock split came into effect Monday. Shares are now trading for more than 120 each.
The split came amid the firm's monster run in 2024. It is up more than 150% so far in 2014. It also sits nearly 30% above its 50-day moving average, according to MarketSurge analysis.
While stock splits are usually bullish for the firms that carry them out, there can be volatility. In theory, splitting the stock makes it more affordable to a wider swathe of investors.
Despite this, the actual value of the company overall does not change due to the split itself.
Yields Up As Fed Meeting Looms
It is a crunch week for the stock market, with the latest Federal Open Market Committee meeting taking place Tuesday and Wednesday.
Wednesday's decision will coincide with the latest Consumer Price Index data. The inflation gauge drops Wednesday.
The benchmark 10-year Treasury yield rose 4 basis points to 4.47%. The two-year yield inched up 1 basis point to 4.88%. The yield curve remains inverted. It has been continuously inverted since early July 2022. Yield curve inversion is usually a leading indicator of a recession.
Hopes for a rate cut have been negatively impacted by a surprisingly strong May jobs report on Friday.
Dow Jones Today: Apple Falls Despite AI Reveal
Apple stock fell nearly 2% despite product announcements at its Worldwide Developers Conference. The firm was under pressure to announce more artificial intelligence features for its products.
The prerecorded event so far has featured the unveiling of new features and announcements, such as the bombshell that the new MacOS is called Sequoia. There are also updates coming for AirPods, tvOS for Apple TV and WatchOS 11.
But the key announcement came from CEO Tim Cook, who introduced Apple Intelligence. The company is partnering with OpenAI to provide some of its AI capabilities. The offering will have features such as context-driven notifications, task execution and image generation based on pictures in your photo library.
Relive our live coverage of Apple's conference.
Cook said it is important that AI evolves into "personal intelligence" and also underlined the emphasis Apple is placing on the importance of privacy being part of the offerings.
"The single most important announcement from my perspective would be a major overhaul and modernization of Siri, which has never been more than a simple question-and-answer machine," Unanimous AI CEO Louis Rosenberg told IBD.
Updated 1:03 p.m. ET
Outside Dow Jones: CrowdStrike Tests Entry
Meanwhile, a trio of strong stocks are trading near entries. Medpace, CrowdStrike and Booking are all eying potential buy points.
CrowdStrike cleared a cup-with-handle entry of 358.84, MarketSurge analysis shows. This is a second-stage base, which is favorable. It was boosted on the announcement it is to join the S&P 500.
Overall performance is very strong for the security software stock, with its IBD Composite Rating coming in at 98. The relative strength line hit fresh highs.
Medpace is one to watch as it forms a flat base with an ideal entry point of 421. The clinical research company holds a best-possible 99 Composite Rating, with earnings performance in particular a strength.
Booking is forming a cup base with an potential buy point of 3,918 and a handle entry at 3,853. This is a second-stage pattern. Both earnings and stock market performance are strong for the travel play.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
