The Dow Jones Industrial Average kicked off June with a decline, reflecting investor concerns over weak US manufacturing data and broader economic uncertainty. Despite the Dow's downturn, the S&P 500 managed a slight gain, while the Nasdaq Composite posted more growth, driven by strong performance in the technology sector. This mixed performance highlights the uncertain
The Dow Jones Industrial Average kicked off June with a decline, reflecting investor concerns over weak US manufacturing data and broader economic uncertainty. Despite the Dow's downturn, the S&P 500 managed a slight gain, while the Nasdaq Composite posted more growth, driven by strong performance in the technology sector. This mixed performance highlights the uncertain confidence in the market, as traders navigate between the challenges posed by economic indicators and the enthusiasm surrounding technological advancements, such as Nvidia's new AI chip announcements. The day’s trading underscored the ongoing volatility and diverse factors influencing investor sentiment.
Key Takeaways:
Dow Jones Slips Amid Economic Concerns: The Dow Jones Industrial Average declined by 115.29 points, or 0.30%, to close at 38,571.03. This drop came after weak US manufacturing data raised concerns about the strength of the economy, with cyclical stocks such as energy, industrials, and materials sectors closing in the red.
S&P 500 and Nasdaq Higher Despite Volatility: The S&P 500 managed a slight gain of 0.11%, finishing the session at 5,283.40. The Nasdaq Composite added 0.56% to reach 16,828.67, driven by strong performance in technology stocks, particularly Nvidia, which rose nearly 5% following the announcement of a new suite of artificial intelligence chips.
Treasury Yields Fall: US Treasury yields declined as investors reacted to weak manufacturing data. The yield on the 10-year Treasury dropped over 8 basis points to 4.43%, while the 2-year Treasury yield fell 5 basis points to 4.83%.
European Markets Edge Higher: The pan-European Stoxx 600 index saw a positive uptick, increasing by 0.32%, driven primarily by strong performances in the construction sector, which led the gains with a rise of 1.74%. In the UK, the FTSE 100 Index dipped slightly by 0.15% to close at 8,262.75, showing a modest pullback amidst the broader European gains. Meanwhile, France's CAC 40 edged up by 0.06% to 7,998, continuing its upward trend from the previous week.
Asian Markets Rally with Record Highs in India: Asian markets saw strong performances, led by India, where the Nifty 50 and S&P BSE Sensex both surged by 3%. Japan's Nikkei 225 closed 1.13% higher, approaching record levels, while the broader Topix index rose 0.9%. In China, the CSI 300 index increased by 0.25% to 3,588.75, strengthened by a private survey showing the manufacturing PMI rose to 51.7 in May. Hong Kong's Hang Seng index also gained 1.77%, and South Korea's Kospi advanced 1.74%. Meanwhile, Australia's S&P/ASX 200 added 0.77%.
US Factory Activity and Construction Spending Fall: US manufacturing activity slowed for the second consecutive month in May, with the ISM manufacturing index dropping to 48.7 from 49.2 in April. This decline, marked by a significant drop in new goods orders, signals a contraction in the sector. Additionally, spending on construction projects unexpectedly slipped, reflecting the broader economic slowdown.
Berkshire Hathaway Stock Appears to Drop 99.9% Amid NYSE Technical Glitch: A technical glitch on the New York Stock Exchange caused a temporary, erroneous display of Berkshire Hathaway (BRK-A) A-shares dropping 99.9%. The issue was resolved later in the day, but the volatility affected trading, with BRK-B shares down as much as 1.1% during the incident.
FX Today:
EUR/USD Climbs on Weak US Manufacturing Data: The EUR/USD pair rose to $1.09, its highest level in 10 weeks, following a decline in the US Manufacturing PMI. The pair reached a weekly peak of $1.0998, just shy of the critical $1.1000 level. On the downside, support lies at $1.0788, the weekly low of $1.0788, and the 200-day SMA at $1.0760.
GBP/USD Tests Multi-Week Highs: GBP/USD advanced to 1.2800, touching multi-week highs. Key resistance levels include 1.2810 and the year-to-date high of 1.2893. If the pair falls below 1.2700, it could drop toward the support at around 1.2643 and further down to 1.2600.
USD/CAD Remains Range-Bound: USD/CAD struggled to break past the 1.3600 handle, with the pair consolidating near the 50-day EMA at 1.3645. Support is seen at the 200-day EMA near 1.3560, while resistance lies at 2024’s peak bids near 1.3850.
USD/MXN Under Pressure Amid Political Uncertainty: USD/MXN climbed above the 200-day SMA of 17.15, following Claudia Sheinbaum's victory and Morena’s majority in Congress. The pair could rise to 18.00, the year-to-date high of 18.15, and potentially higher to 18.48. On the downside, a drop below 17.00 may pave the way to test the year-to-date low of 16.25.
Gold Rebounds After US Manufacturing Data: Spot gold was up 0.9% at $2,348.06 per ounce, continuing its upward trajectory after posting a 2% gain last month. US gold futures rose about 1% to $2,368.60 per ounce. Recent prices saw a high of $2,449.89 on May 20.
Oil Prices Drop Amid OPEC+ Announcements: US crude oil prices fell over 3% with the West Texas Intermediate July contract settling at $74.22 per barrel, down $2.77 or 3.6%. Brent crude for August also declined by $2.75 or 3.39%, closing at $78.36 per barrel.
Market Movers:
GameStop Surges on Speculation: GameStop shares jumped 21% amid speculation that Keith Gill, may hold a significant position in the video game retailer. Gill reportedly posted a screenshot of his portfolio, indicating ownership of five million shares worth over $100 million and 120,000 call options.
Stericycle Rises Following Acquisition Announcement: Stericycle shares surged nearly 14.6% after Waste Management announced it would acquire the company for $7.2 billion. In contrast, Waste Management's shares slid 4.5% on the news.
Spotify Climbs on Subscription Price Increase: Spotify's shares climbed 5.7% after announcing a premium subscription price increase in the US starting in July. This marks the Swedish company's second price hike in a year.
GSK Falls on Legal Setback: Shares of GSK fell more than 8.7% after a Delaware State Court ruled that scientific evidence can be presented in approximately 75,000 cases alleging that the discontinued heartburn drug Zantac may contain a carcinogen.
Paramount Global Advances on Merger News: Paramount Global shares advanced 7.5% following reports that the company and Skydance have agreed to terms of a merger. The deal is awaiting approval from Paramount's controlling shareholder, Shari Redstone.
Lattice Semiconductor Drops Amid CEO Departure: Lattice Semiconductor shares fell 15.5% after CEO Jim Anderson left to join Coherent as its new CEO. Coherent’s stock price jumped 22.9% following the announcement. Esam Elashmawi, Lattice’s marketing and strategy chief, was named interim CEO.
MarineMax Surges on Acquisition Talks: MarineMax shares surged 27% following a Bloomberg News report that OneWater Marine is in talks to purchase the company for $40 per share. This news highlights the potential consolidation in the boat and yacht services sector.
AMD and Nvidia Respond to AI Chip Announcements: AMD shares declined around 2% after announcing new AI chips, while Nvidia shares rose 4.9% following the unveiling of its next-generation AI chips, expected to succeed its previous "Blackwell" product released in March.
Atos Plummets on Rescue Deal Concerns: Shares of French IT firm Atos tumbled 18.31% after announcing it is working with financial creditors to secure support for a rescue deal by June 5. The company aims to reach a final agreement on restructuring by July, raising investor concerns over massive dilution.
Structure Therapeutics Soars on Positive Trial Results: Structure Therapeutics shares soared 54.2% after reporting positive results from a mid-stage clinical trial for its experimental anti-obesity drug, which helped patients lose about 6% of their starting weight after 12 weeks of treatment.
As June begins, the mixed performance of the Dow, S&P 500, and Nasdaq highlights the market's cautious positivity amid ongoing economic uncertainties. While the Dow slid over 100 points due to weak manufacturing data, the tech-driven Nasdaq and the broad-based S&P 500 showed resilience with gains, driven by strong performances from companies like Nvidia. The fluctuating Treasury yields and the rebound in gold prices reflect investor sentiment navigating the balance between economic slowdown concerns and the anticipation of potential interest rate adjustments. The market's focus remains on upcoming economic updates, particularly the May jobs report, which could significantly influence the Federal Reserve's policy direction. Meanwhile, the dramatic moves in individual stocks such as GameStop, Stericycle, and Atos underscore the dynamic nature of the current trading environment, where both corporate developments and broader economic signals drive investor decisions.
