Stocks ending mixed Thursday, with the S&P 500 and Nasdaq again reaching record closings amid signs that inflation may be easing.
The S&P 500 gained 0.23% to finish at 5,433.74, while the tech-heavy Nasdaq rose 0.34% and closed at 17,667.56. The Dow Jones Industrial Average lost 65.11 points, or 0.17%, to end at 38,647.10.
Both S&P 500 and the Nasdaq notched their fourth straight closing record.
The Producer Price Index for Final Demand (PPI) fell 0.2% in May, below the consensus forecast for a 0.1% increase.
Final demand foods prices fell 0.1%, a second consecutive decline, while final demand energy prices fell 4.8% and other goods prices rose 0.3%.
"The downside surprise from producer price inflation reinforces the message of the May CPI report," said Bill Adams, chief economist for Comerica Bank. "Inflation took two steps in the right direction last month after surprising to the upside in early 2024."
Meanwhile, Adams said that initial jobless claims spiked in the first half of June, suggesting the unemployment rate’s move higher might hold in the next release, but "jobless claims are volatile month to month, so it’s very early to call this a sign of broader labor market weakness."
"In short, the latest data in hand nudge the door a little wider open for the Fed to begin making an interest rate cut later this year," he said. "Comerica forecasts for the Fed to make its first cut of this cycle in September, followed by a second cut in December."
Updated at 1:10 PM EDT
Bond bulls
The Treasury sold $22 billion in new 30-year bonds Thursday, wrapping-up another week of benchmark auctions that drew solid interest from foreign and domestic investors.
Investors placed bids worth just under $55 billion for the new paper on offer, generating a demand ratio of 2.49 times, firmly ahead of the six-auction average of 2.41 and the highest since last June.
Foreign buyers took down 68.5% of the sale, ahead of the six-auction average of 64.9%, with the average yield pegged at 4.403%.
$TLT $TMF
— ARMR Report (@BretRosenthal) June 13, 2024
U.S. 30-Year Bond Auction Details:— High Yield: 4.403% (prev 4.635%)
— When-Issued: 4.418%
— Bid-to-Cover Ratio: 2.49 (prev 2.41)
— Directs Accepted: 17.8% (prev 19.8%)
— Indirects Accepted: 68.5% (prev 64.9%)
— Dealers' Takedown: 13.7% (prev 15.4%)
— Stop-Through:…
Updated at 11:51 AM EDT
Tech records
The Nasdaq hit a fresh record high of 17,141.80 points earlier in the session, and was last marked 0.3% higher heading into the middle of the trading day, with chip stocks pacing the overall advance.
The Philadelphia Semiconductor Index extended its 2024 gain to 33.6%, while the S&P 500 information tech sector also hit a fresh all-time high.
$SOX Semiconductor index has again broken above its trendline running back to the Oct '22 lows. Last time it pulled back under which started a correction. Is this time different? pic.twitter.com/e96GgHiVNM
— Neil Sethi (@neilksethi) June 13, 2024
Updated at 9:52 AM EDT
AVGO-Go
Broadcom shares hit a fresh record high in early trading, while extending their 2024 gain to around 58%, after the networking chipmaker posted better-than-expected second quarter earnings and boosted its AI revenue forecast for the back half of the year.
Broadcom's board declared a 10-for-1 stock split, effective after trading closes on July 12. Shareholders of record July 11 will receive nine new Broadcom shares for each one that they hold.
Broadcom shares were marked 15.1% higher in early trading to change hands at $1,720.25 each, a move that would extend the stock's year-to-date gain to around 58%.
Related: Analysts overhaul Broadcom stock price targets after Q2 earnings
Updated at 9:37 AM EDT
Mixed open
The S&P 500 was marked 13 points, or 0.24% higher in the opening minutes of trading, with the Nasdaq up 115 points, or 0.64%.
The Dow, meanwhile, was marked 172 points lower , even with Apple (AAPL) rising for a third straight day to extend the best streak of non-Covid gains in fifteen years
S&P 500 Opening Bell Heatmap (Jun. 13, 2024)$SPY +0.24%🟩$QQQ +0.79%🟩$DJI -0.40%🟥$IWM -0.25%🟥 pic.twitter.com/e95AWchKgv
— Wall St Engine (@wallstengine) June 13, 2024
Updated at 8:37 AM EDT
Rate bet boost
Weekly jobless claims jumped higher over the period ending June 8, the Labor Department reported, rising by 13,000 to 242,000 and topping Wall Street's 225,000 forecast.
Producer price inflation, meanwhile, came in below Street forecasts, easing to 2.2% on the year in May and falling 0.2% on the month, a bigger-than-expected decline that echoes the softer consumer price inflation reading from Wednesday.
Benchmark 10-year note yields fell another 5 basis points to 4.251% following the data releases, while 2-year notes slipped to 4.672%
Stock futures were also on the rise, with the S&P 500 set for a 22 point opening bell gain and the Nasdaq called 180 points higher.
❖ U.S PPI (MOM) (MAY) ACTUAL: -0.2% VS 0.5% PREVIOUS; EST 0.1%
— *Walter Bloomberg (@DeItaone) June 13, 2024
❖ U.S PPI (YOY) (MAY) ACTUAL: 2.2% VS 2.2% PREVIOUS; EST 2.5%
❖ U.S CORE PPI (MOM) (MAY) ACTUAL: 0.0% VS 0.5% PREVIOUS; EST 0.3%
❖ U.S CORE PPI (YOY) (MAY) ACTUAL: 2.3% VS 2.4% PREVIOUS; EST 2.4%
Stock Market Today
Stocks ended higher last night, with the S&P 500 and the Nasdaq recording their third straight set of record high closes, as Treasury yields tumbled on the back of a cooler-than-expected reading for CPI inflation over the month of May.
The headline tally, which showed the slowest monthly advance for overall price pressures in four years, pulled benchmark 10-year notes yields more than 10 basis points lower on the day as investors bet that easing inflation would move the Fed towards a series of autumn rate cuts.
However, the central bank's new Summary of Economic Projections, better-known as the 'dot plots', pointed to only one rate cut between now and the end of the year when they were released following the Fed's rate decision, which held the benchmark lending rate steady at between 5.25% and 5.5%.
"Given the coordinated commentary from Fed members leading up to the June Fed meeting, it wasn’t surprising to see rate cuts delayed into the end of the year," said Charlie Ripley, senior investment strategist for Allianz Investment Management.
"However, moving from three cuts expected at the March meeting to only one cut for this year seems like an overly gloomy view on inflation progress," he added.
Related: Federal Reserve updates timing of first interest rate cut
The CME Group's FedWatch pegs the odds of a September rate cut at around 61%, with similar chances for a follow-on move at the final meeting of the year in December.
Benchmark 2-year notes were trading at 4.756% heading into the start of the New York session, with 10-year notes holding at 4.308% ahead of a $22 billion auction of 30-year bonds later in the afternoon.
On Wall Street, stocks are set for a mixed open ahead of weekly jobless claims data and the Commerce Department's producer price inflation report for the month of May, both of which are expected at 8:30 am Eastern time.
Futures contracts tied to the S&P 500, which is now up 3.17% for the quarter and 13.65% for the year, are priced for a 3 point opening bell gain, while those linked to the Dow Jones Industrial Average are indicating a 139 point pullback.
The tech-focused Nasdaq, meanwhile, is looking at a firmer open of around 117 points.
Stocks on the move include Tesla (TSLA) , which is set for one of its best two-day gains in at least three years, rising 4.9% after CEO Elon Musk said he has won two key shareholder votes, including the authorization of a $55.8 billion pay deal.
Related: Analyst predicts Tesla's Elon Musk may finally create Apple rival
Broadcom (AVGO) shares, meanwhile, surged 12.7% after the chip and networking equipment maker boosted its full-year AI revenue forecast and unveiled plans for a 10-for-1 stock split.
More Wall Street Analysts:
- Analyst revamps Microsoft stock price target despite controversy
- Analysts reset Nio stock price targets after earnings
- Dollar Tree’s new price strategy prompts analysts to revise targets
In overseas markets, Europe's Stoxx 600 benchmark slumped 0.97% in early Frankfurt dealing, while the FTSE 100 was marked 0.5% lower in London.
Overnight in Asia, the regional MSCI ex-Japan benchmark rose 0.73% heading into the close of trading while the Nikkei 225 ended 0.4% lower in Tokyo.
Related: Veteran fund manager picks favorite stocks for 2024
