Market Performance
The S&P 500 (+0.3%) and Nasdaq Composite (+0.9%) climbed further into record territory today. A big jump in shares of Apple (AAPL 207.15, +14.03, +7.3%), which also hit a fresh record high, provided a nice boost to index performance following yesterday's product/AI presentation at its Worldwide Developers Conference.
Other mega cap stocks also picked up steam in the afternoon trade, reacting to a drop in market rates. The Vanguard Mega Cap Growth ETF (MGK) settled 1.1% higher.
Bond Market
The 10-yr note yield fell seven basis points lower at 4.40%, and the 2-yr note yield fell five basis points to 4.83% in response to a strong $39 billion 10-yr note sale. This price action is also ahead of the May Consumer Price Index, which is released at 8:30 ET tomorrow.
Wednesday's calendar also features the FOMC policy directive, which includes an updated Summary of Economic Projections at 2:00 p.m. ET, followed by Fed Chair Powell's press conference at 2:30 p.m. ET. Hesitation in front of these market-moving events kept the broader market in check despite the outperformance in mega caps.
Market Indices
- Dow Jones Industrial Average fell 0.3%
- Russell 2000 closed 0.4% lower
- Nasdaq Composite: +15.5% YTD
- S&P 500: +12.7% YTD
- S&P Midcap 400: +4.8% YTD
- Dow Jones Industrial Average: +2.8% YTD
- Russell 2000: -0.1% YTD
Sectors
Only two S&P 500 sectors closed with gains:
- Information technology (+1.7%)
- Communication services (+0.5%)
The financial sector saw the largest decline by a decent margin, falling 1.2%.
Individual Stocks
Shares of Paramount Global (PARA 11.04, -0.94, -7.9%) settled sharply lower after news that National Amusements has failed to reach a deal with Skydance.
Economic Data
Today's economic data was limited to the NFIB Small Business Optimism survey, which rose to 90.5 in May from 89.7 in April.
Looking Ahead
Market participants will receive the May Consumer Price Index at 8:30 ET. Other data include:
Today's News
Oracle (ORCL, Financial) shares rose 5% in extended-hours trading on Tuesday after reporting fiscal fourth-quarter results and announcing several key AI-centric deals. The company earned an adjusted $1.63 per share on $14.3B in revenue, with cloud revenue coming in at $5.3B. Despite missing some estimates, Oracle saw significant growth in infrastructure and application revenue and signed the largest sales contracts in its history, driven by demand for AI training in the Oracle Cloud.
Paramount Global (PARA, Financial) shares dropped 8% amid reports that Shari Redstone's National Amusements halted merger talks with Skydance Media. The negotiations reportedly fell apart over disagreements on a potential shareholder vote for merging Paramount into Skydance. As a result, Redstone is now expected to pursue the sale of just National Amusements.
Interactive Brokers (IBKR) revealed that Nvidia (NVDA, Financial) was the most-actively traded asset on its platform over the past week, surpassing GameStop (GME). Nvidia logged 570.6K trades across its stock and options, maintaining its top spot despite the recent drama surrounding GameStop and its Q1 results that missed expectations.
Apple (AAPL, Financial) surged during Tuesday's session, hitting an intraday peak for the first time since December last year. The tech giant impressed investors with its AI offerings at its annual developers conference, contributing to record highs in the S&P 500 and Nasdaq Composite. However, financial stocks like American Express (AXP) and JPMorgan (JPM) weighed down the Dow.
Realty Income (O, Financial) declared a $0.263/share monthly dividend, a 0.2% increase from the prior dividend. The forward yield stands at 6.04%, with the dividend payable on July 15. The company also boosted its investment volume guidance and adjusted the lower end of its FFO range.
Autodesk (ADSK, Financial) reported Q1 Non-GAAP EPS of $1.87, missing estimates by $0.11, and revenue of $1.42B, which also missed by $60M. Despite the misses, the company's operating margin improved, and cash flow from operating activities was strong at $494 million.
Ready Capital (RC, Financial) announced the acquisition of Madison One Capital, M1 CUSO, and Madison One Lender Services, focusing on USDA and SBA guaranteed loan products. The terms of the transaction were not disclosed.
Comcast (CMCSA, Financial) shares continued their losing streak, closing 1.2% lower on Tuesday. The stock has lost more than 11% so far this year, underperforming the S&P 500. Despite this, Comcast received a Strong Buy rating from analysts, with high marks for profitability.
Robinhood Markets (HOOD, Financial) reported equity notional trading volume of $86.8B in May, up 23% from April. However, its crypto notional trading volume dropped 30% from the prior month. Assets under custody grew to $135.0B, with net deposits at $3.6B.
Costco Wholesale (COST, Financial) shares gained for the seventh straight session, registering a near 5% jump over that period. The stock has risen about 27% since the start of the year, outperforming the broader market. Analysts generally rate the company as a Buy.
HP (HPQ, Financial) declared a $0.2756/share quarterly dividend, in line with previous dividends. The forward yield is 3.03%, with the dividend payable on October 2. The company is optimistic about the potential for an AI PC supercycle to drive further growth.
KKR (KKR, Financial) announced a significant minority investment in Quick Quack Car Wash, one of the largest express format car wash operators in the U.S. This investment was made primarily through KKR's Strategic Investments Group, with Quick Quack's founders and equity partner retaining meaningful stakes.
Orchid Island Capital (ORC) declared a $0.12/share monthly dividend, maintaining its forward yield at 17.52%. The dividend is payable on July 30, continuing the company's trend of high yield payouts.
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