Nasdaq closes above 17,000; S&P 500 slightly higher, Dow down

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The Nasdaq achieved a historic milestone on Tuesday, surpassing 17,000 for the first time ever. This achievement was driven by the strong performance of Nvidia, which saw a 7% increase in its stock price. This positive momentum also benefited other chip stocks, leading to a 1.9% rise in the semiconductor index.

Among sectors, technology stocks in the S&P 500 experienced the largest gains, while healthcare and industrials saw declines. However, overall market performance was relatively mixed, with the S&P 500 closing only slightly higher and the Dow ending lower.

In the afternoon, stocks faced downward pressure as U.S. Treasury yields reached multi-week highs following disappointing debt auctions. This increase in yields was seen as a negative development by market participants, as it could potentially impact the economy, consumers, and hinder the Federal Reserve’s plans for monetary easing.

Quincy Krosby, Chief Global Strategist at LPL Financial, noted that the market is concerned about yields rising to a level that could pose a threat to the economy and the consumer, and disrupt the Federal Reserve’s timeline for easing measures.
Investors are eagerly awaiting the release of U.S. inflation data this week, as it could potentially impact expectations for Federal Reserve rate cuts.

The highly anticipated report, the U.S. core Personal Consumption Expenditures Price Index for April, is scheduled to be released later this week. Analysts predict that the Fed’s preferred inflation indicator will remain stable on a monthly basis.

In yesterday’s trading session, the Dow Jones Industrial Average experienced a decline of 216.73 points, or 0.55%, closing at 38,852.86. On the other hand, the S&P 500 saw a marginal increase of 1.32 points, or 0.02%, reaching 5,306.04. The Nasdaq Composite had a stronger performance, gaining 99.09 points, or 0.59%, closing at 17,019.88.

Recently, Wall Street has been setting new records as investors speculate that the U.S. central bank might initiate interest rate cuts later this year.

However, expectations regarding the timing of these rate cuts have been fluctuating. Policymakers remain cautious due to persistently high inflation data.

According to the CME FedWatch Tool, the probability of a rate reduction of at least 25 basis points is currently above 50% for the months of November and December this year. The odds of a rate cut in September have dropped to around 46% from over 50% just a week ago.
This week, attention will also be on the retail sector as several retailers, including Dollar General, Advance Auto Parts, and Best Buy, are set to release their financial results.

On Tuesday, U.S. trading will transition to a shorter settlement period, a change regulators hope will reduce risk and improve efficiency. However, it is expected to temporarily increase transaction failures for investors.

Apple saw its shares rise as iPhone sales in China surged 52% in April compared to the previous year, according to calculations based on industry data from Reuters. However, the stock’s gains were trimmed later in the day, and it closed only slightly higher at $189.99.

GameStop’s shares experienced a significant increase of about 25.2% and closed at $23.78. The videogame retailer announced on Friday that it had raised $933 million through the sale of 45 million shares as part of an “at-the-market” offering.

Shareholders of Hess approved the $53 billion merger with Chevron. Hess shares closed up 0.4%, while Chevron shares closed up 0.8%, and Exxon Mobil shares closed up 1.3%.
At the Nasdaq, there were more declining issues than advancers, with a ratio of 1.34-to-1. Similarly, on the NYSE, the ratio was 1.75-to-1.

The S&P 500 had 24 new 52-week highs and 11 new lows, while the Nasdaq Composite saw 93 new highs and 107 new lows.

The total volume of shares traded on U.S. exchanges was 11.91 billion, slightly lower than the 12.32 billion average over the last 20 trading days.