Stocks finished slightly higher Thursday, even with Micron Technology weighing on tech shares, as Wall Street looked to the release of key inflation data.
The Dow Jones Industrial Average gained 36.26, or 0.09%, to finished 39,164.06, while the S&P 500 rose 0.09% to end the session 5,482.87, and the tech-heavy advanced 0.30% to 17,858.68.
Micron shares finished down 7.12% to $132.23 after the AI memory chipmaker issued a tepid profit forecast, which offset a solid third-quarter report and challenged the market consensus on near-term demand.
Meanwhile, Nvidia lost 1.91% to end at $123.99.
Investors are focusing on the release of May’s core personal consumption expenditures price index, which is the Fed’s preferred measure of inflation.
Economists polled by Dow Jones expect core PCE rose 0.1% month over month and 2.6% from a year-ago.
“Should the PCE disappoint, stagflation headlines will hit the tape, but if estimates hold or surprise with cooler data, it should help the market ease into July. July, according to years of historical market statistics, tends to be a decidedly positive month for markets, especially the first half,” said Quincy Krosby, Chief Global Strategist for LPL Financial.
Still, he added, “an overbought market and relatively expensive market based on just a handful of mega names may need to recalibrate and allow other sectors to co-exist with them or even begin to lead the market.”
"Such adjustments can trigger pockets of volatility coupled with attractive pockets of opportunity," Krosby said.
Updated at 12:27 PM EDT
Micron lower
Micron shares extended their decline in mid-day trading following a muted near-term outlook that could raise questions over AI investment spending into the second half of the year.
Micron shares were marked 7.7% lower in mid-day trading to change hands at $131.42 each, a move that would still leave the stock up more than 55% for the year.
Related: Analysts revise Micron stock price targets after earnings
Updated at 10:26 AM EDT
Bostic boost?
Atlanta Fed President Raphael Bostic backed the idea of a 2024 rate cut is a paper published Thursday, arguing that inflation "appears to be narrowing" into the back half of the year.
Bostic said he isn't "locked-in" to any particular policy path, however, and said there were "plausible scenarios in which more cuts, no cuts, or even a raise could be appropriate."
"I will let the data and conditions on the ground be my guide," he added.
Stocks turned modestly higher on the back of his comments, with the S&P 500 last seen 7 points, or 0.12% higher and the Nasdaq up 54 points, or 0.3%.
In his second quarter president’s message, Atlanta Fed president @RaphaelBostic says the stubbornness of inflation seen early this year indicates that progress toward the FOMC’s target rate will likely come more slowly than he’d hoped. Read his new essay: https://t.co/8o1IT8tx1I pic.twitter.com/EyOUHhrnmL
— Atlanta Fed (@AtlantaFed) June 27, 2024
Updated at 9:57 AM EDT
Muted open
The S&P 500 was last marked little-changed from last night's close, and trading at 5,477.48 points, while the Nasdaq nudged 20 points, or 0.12%, to the upside.
The Dow, meanwhile, slipped 30 points in the opening minutes of trading.
S&P 500 Opening Bell Heatmap (Jun. 27, 2024)$SPY +0.01%🟩$QQQ +0.12%🟩$DJI -0.17%🟥$IWM -0.01%🟥 pic.twitter.com/cH890HtUGv
— Wall St Engine (@wallstengine) June 27, 2024
Updated at 8:37 AM EDT
Mixed data dump
The economy grew at a modest 1.4% pace over the first three months of the year, the Commerce Department said in its final GDP estimate, a modestly higher tally compared to its prior 1.3% forecast, and the weakest since the second quarter of 2022.
Weekly jobless claims, meanwhile, fell by 6,000 over the period ending on June 22 to around 233,000, just under the Street consensus forecast of 236,000.
Stocks were little-changed following the data releases, which also included a modestly firmer reading for June durable goods orders, with the S&P 500 called 2 points lower and the Dow set for a 50 point decline.
U.S INITIAL JOBLESS CLAIMS ACTUAL: 233K VS 238K PREVIOUS; EST 235K
— *Walter Bloomberg (@DeItaone) June 27, 2024
U.S CONTINUING JOBLESS CLAIMS ACTUAL: 1839K VS 1828K PREVIOUS; EST 1828K
Updated at 7:53 AM EDT
Walgreens in deep red
Walgreen Boots Alliance (WBA) shares plunged lower in early trading after the pharmacy and retail chain slashed its full-year profit forecast and unveiled plans for a "significant multi-year" program of store closures.
Walgreens said full-year profits would likely come in between $2.80 to $2.95 per share, a 40 cent reduction form its March forecast, following a weaker-than-expected set of third quarter earnings published Thursday.
Walgreens $WBA down 15% premarket on slashed guidance...
— Special Situations 🌐 Research Newsletter (Jay) (@SpecialSitsNews) June 27, 2024
- Adj EPS 63c, est 68c pic.twitter.com/HRlJiDzVr8
Check back for updates throughout the trading day
Stocks ended higher on Wednesday, with Amazon (AMZN) hitting a record and passing a $2 trillion market capitalization for the first time, even as Treasury yields nudged higher following a $70 billion auction of new 5-year notes.
Another benchmark auction, with $70 billion of 7-year paper on sale, will likely keep yields elevated into Friday's PCE inflation reading, though weekly jobless claims data and a third estimate of first quarter GDP are also due prior to the start of today's session.
Benchmark 10-year notes were last seen trading at 4.335%, with 2-year notes pegged at 4.751% heading into the start of the New York trading session.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.14% lower at 105.905 but still within touching distance of the highest levels in two months.
Smith Collection/Gado/Getty Images
On Wall Street, Micron (MU) shares slumped 5.6%, pulling chipmakers such as Nvidia (NVDA) and Advanced Micro Devices (AMD) lower as well.
The moves came after Micron issued a muted near-term sales and profit forecast, offsetting a stronger-than-expected fiscal-third-quarter update.
Bank shares were also in focus, with JP Morgan slipping 0.03% and Citigroup rising 0.47%, following the results of the Federal Reserve's annual stress tests of the country's biggest lenders.
The Fed said all 31 banks were able to withstand a hypothetical scenario of surging unemployment and a collapse in real estate prices, paving the way for dividends and buybacks over the second half.
Heading into the start of the trading day, futures contracts tied to the S&P 500 suggest a 7 point opening-bell decline and the Dow Jones Industrial Average indicating a 60 point pullback.
Premarket declines for Micron and Nvidia have the tech-focused Nasdaq called 43 points lower.
More Wall Street Analysts:
- Analyst updates Oracle stock price target after earnings
- Analyst reboots Trade Desk stock price target after Netflix deal
- Analysts adjust Micron stock price target ahead of earnings
In Europe, the regional Stoxx 600 benchmark slipped 0.17% in Frankfurt. Britain's FTSE 100 was down 0.24% in London, in a muted session for stocks heading into this weekend's parliamentary elections in France.
Overnight in Asia, Japan's Finance Minister Shunichi Suzuki issued a direct warning on currency intervention after the yen hit a 38-year low of 160.88 against the U.S. dollar, pulling the Nikkei 225 0.82% lower in Tokyo.
The regionwide MSCI ex-Japan benchmark, meanwhile, was marked 0.4% lower heading into the close of trading.
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