Market Performance
The Nasdaq Composite (+0.7%) logged another record closing high, supported by gains in mega caps and semiconductor-related names. The S&P 500 (+0.2%) and Russell 2000 (+0.3%) also closed with gains, while the Dow Jones Industrial Average (-0.5%) fell nearly 200 points.
Market Breadth
Market breadth favored advancers by a slim margin at both the NYSE and the Nasdaq. The overall upside bias was driven by carryover momentum following last week's solid gains and strength in mega caps and chipmakers.
Sector Performance
- The PHLX Semiconductor Index (SOX) jumped 2.2%.
- The Vanguard Mega Cap Growth ETF (MGK) logged a 0.7% gain.
- The S&P 500 information technology sector (+1.3%) led the index by a wide margin, benefitting from price action in its semiconductor and mega cap components.
- The heavily-weighted financial sector logged the largest loss, falling 1.2%. This was due in part to a sizable loss in JPMorgan Chase (JPM, Financial) after CEO Dimon said the company is not expecting to buy back a lot of stock at these levels.
- The consumer discretionary sector (-0.7%) was the next worst performer due to losses in Amazon.com (AMZN) and Tesla (TSLA, Financial). Declines in retailer components also contributed to the underperformance of the consumer discretionary sector.
Notable Stock Movements
- NVIDIA (NVDA, Financial) was a standout, gaining 2.5% after several analysts raised their price targets ahead of its earnings report on Wednesday.
- Microsoft (MSFT, Financial) logged a 1.2% gain after introducing Co Pilot+ PCs and ahead of its Build Developers Conference starting tomorrow.
- JPMorgan Chase (JPM) fell 4.5% after CEO Dimon’s comments on stock buybacks.
- Amazon.com (AMZN) and Tesla (TSLA) saw declines of 0.6% and 1.4%, respectively.
Market Rates
Market rates settled slightly higher, acting as a limiting factor for equities. The 10-yr note yield settled two basis points higher at 4.44%, and the 2-yr note yield rose two basis points to 4.84%.
Upcoming Economic Data
There was no US economic data of note today and none is expected tomorrow. Key releases this week include:
Today's News
JPMorgan Chase (JPM, Financial) shares dipped 1.5% after CEO Jamie Dimon announced that the bank will not repurchase a significant amount of stock at current prices. Dimon expressed a cautious outlook on the economy, citing geopolitical tensions and persistent inflation as key concerns.
Dell Technologies (DELL, Financial) revealed its partnership with Nvidia (NVDA, Financial) to integrate the latest Blackwell GPUs into its servers, addressing the rising demand for AI capabilities. Dell's new PowerEdge XE9680L server, featuring eight Nvidia Blackwell Tensor Core GPUs, is designed to support AI workloads more efficiently.
Tesla (TSLA, Financial) is set to hold its annual shareholder meeting in Austin, Texas, on June 13. The agenda includes voting on CEO Elon Musk's compensation package and the formal ratification of the company's re-incorporation in Texas. The board has shown strong support for Musk's compensation plan.
Microsoft (MSFT, Financial) introduced what CEO Satya Nadella called the "fastest, most AI-ready PC ever built," featuring chips from Qualcomm (QCOM, Financial), AMD (AMD, Financial), and Intel (INTC, Financial). The new Copilot Plus PCs are expected to sell 50 million units this year, with manufacturing partners including Acer, Asus, Dell (DELL, Financial), HP (HPQ), Lenovo, and Samsung.
Zoom Video (ZM, Financial) shares fell over 2% after reporting mixed first-quarter results and guidance. The company posted an adjusted $1.35 per share on $1.14 billion in sales, but its enterprise customer count and future earnings guidance fell short of expectations.
Palo Alto Networks (PANW, Financial) reported strong Q3 results, with non-GAAP EPS of $1.32 beating estimates and revenue growing 15.1% year-over-year to $1.98 billion. The company provided a positive outlook for Q4 and 2024, with expected revenue growth and increased billings.
Hims & Hers Health (HIMS, Financial) surged ~31% after announcing it will offer compounded versions of Novo Nordisk's (NVO) semaglutide at a lower cost. The company plans to provide injectable and oral versions of the drug, commonly known as Ozempic and Rybelsus, respectively.
Faraday Future Intelligent Electric (FFIE, Financial) experienced an 85% gain amid high trading volume, despite the absence of fundamental news. The stock's volatility is attributed to a high short interest, with the company set to release its Q4 earnings report on May 28.
Kroger (KR, Financial) drivers at a Romulus, Michigan fulfillment site voted to join the Teamsters Union, aiming for higher wages and better working conditions. This marks the first unionization effort at a Kroger fulfillment center, though many of its stores are already unionized.
Sprout Social (SPT, Financial) gained 6.3% following reports that its founders are in talks with private equity firms to take the company private. The board has formed a committee to evaluate the potential deal, with Morgan Stanley as its advisor.
Instacart (CART, Financial) shares fell after CFO Emily Reuter indicated that the company does not expect to exceed its gross transaction value guidance. Despite a strong Q1 performance, Q2 is expected to be less favorable due to seasonal factors and the impact of a new partnership with Uber (UBER).
Rio Tinto (RIO, Financial) declared force majeure on alumina cargoes from its Queensland refineries due to gas shortages. The impact is limited to third-party sales, with Rio's own aluminum operations remaining unaffected.
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