US close: Nasdaq falls on mixed day for stocks

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Nvidia Corp.

$126.10

07:00 28/06/24

1.70%

$2.11

Wall Street experienced a mixed close on Monday as traders navigated the final week of the second quarter.

United Parcel Service Inc.

$136.89

07:00 28/06/24

0.78%

$1.06

The Dow Jones Industrial Average saw gains, increasing by 0.67% to end the day at 39,411.21 points.

In contrast, the S&P 500 dropped by 0.31% to 5,447.87, while the tech-heavy Nasdaq Composite took a more significant hit, falling 1.09% to finish at 17,496.82.

Currency markets showed minimal fluctuations, with the dollar last down 0.01% on sterling to trade at 78.82p, while it remained steady against the euro at 93.17 euro cents.

Similarly, the greenback held constant on the yen, changing hands at JPY 159.62.

“Just as worries about poor market breadth hit the mainstream, breadth begins to recover,” said IG chief market analyst Chris Beauchamp earlier.

“Last week saw Nvidia soar and the Nasdaq 100 hit 20,000, but the new week has continued where Friday left off, with old economy stocks rallying and tech continuing to drop back.

“This kind of rotation is very healthy for a continuation of the rally into July.”

Dallas Fed reports slight improvement in manufacturing sector

In economic news, the Dallas Federal Reserve reported a slight improvement in its manufacturing sector index for June, which rose to -15.1 from -19.4 in May, suggesting a less negative outlook among regional manufacturers.

The Fed's national activity index meanwhile showed modest gains, moving from -0.17 in March to 0.01 in April, indicating a stabilisation in national economic activity.

Attention was now turning towards the upcoming release of the personal consumption expenditures (PCE) index for May, expected on Friday.

Economists anticipated that core PCE, which is closely monitored by the Federal Reserve for inflation signals, would show a decrease to 2.6% year-on-year, from a previous 2.8%.

“Coming off the back of last week’s bumper services PMI reading, there is a concern that the vibrancy of the US economy could ultimately produce a longer wait for those desperate for that first Federal Reserve rate cut," said Joshua Mahony, chief market analyst at Scope Markets.

“With crude oil prices on the rise once again today, keeping a lid on fuel costs will remain a key factor in avoiding a fresh resurgence in price pressures.”

Across the Atlantic, the UK Confederation of British Industry (CBI) noted that manufacturing output had stabilised in the past three months, following a period of growth - the first in over a year and a half.

Despite that stability, the volume of export orders has declined sharply, underscoring challenges in international markets.

Manufacturers remained cautiously optimistic, expecting a modest increase in output in the coming quarter.

On the continent, business sentiment in Germany deteriorated in June, as the Ifo Institute's business climate index declined to 88.6, down from 89.3 in May.

The dip was driven by a decrease in future expectations and a notable contraction in manufacturing, with the manufacturing gauge falling deeper into negative territory.

However, there was a slight improvement in the service sector, which could provide some balance to the broader economic picture.

Nvidia and Super Micro in the red, Affirm rises on broker coverage

In equity markets, Nvidia Corporation dropped 6.68%.

The fall comes after a recent surge in its stock value, with Monday’s movements attributed to profit-taking by investors.

Similarly, Super Micro Computer experienced a sharp decrease, falling by 8.65%, marking its worst daily performance since early May.

On the upside, Apple shares edged up 0.31% despite facing new regulatory challenges in Europe, where it was accused of violating the Digital Markets Act.

United Parcel Service (UPS) also saw gains, rising by 1.46%.

The increase followed news of UPS selling its Coyote Logistics division to RXO for just over $1bn - significantly less than the $1.8bn it paid nine years ago.

Buy-now-pay-later provider Affirm Holdings surged by 12.82%, driven by positive analyst coverage from Goldman Sachs, which initiated a 'buy' rating on the stock.

Analyst Will Nance highlighted Affirm's underwriting capabilities as a standout feature compared to its fintech peers.

Reporting by Josh White for Sharecast.com.

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