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S&P 500, Nasdaq fall from record highs, NVIDIA drops

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U.S. stocks were little changed on Thursday after a bullish session led by big tech stocks as investors considered the latest jobs data amid growing hopes of an interest rate cut.

The S&P 500 (^GSPC) was trading near-flat after a record close. The Dow Jones Industrial Average (^DJI) rose 0.2%, while the tech-heavy Nasdaq Composite Index (^IXIC) pulled back in early trading, losing nearly 0.2%.

Stocks are taking a breather after a ferocious rally that propelled the Nasdaq to an all-time high on Wednesday. Tech stocks led the gains, with Nvidia (NVDA) overtaking Apple (AAPL) to become the second-largest U.S. company.

But on Thursday, Nvidia shares gave up their opening gains and fell below flat, pushing the AI ​​chip giant’s market cap below $3 trillion. Other large tech stocks were flat, with Apple and Meta (META) little changed.

Meanwhile, government bond yields have recovered from declines, supporting stock gains. The benchmark 10-year Treasury yield (^TNX) rose to around 4.30% after hitting its lowest level since March on Wednesday.

The ADP private payrolls number is just the latest sign of a cooling labor market, as markets have welcomed recent weakness in economic data as a reason to again consider a shift in Federal Reserve policy. Traders now see a 69% chance of a September rate cut, up from about 50% a week ago, according to the CME FedWatch tool.

Meanwhile, across the Atlantic, the European Central Bank cut interest rates by 25 basis points on Thursday, the first time since 2019, in a widely expected move.

read more: How does the labor market affect inflation?

U.S. weekly jobless claims released Thursday morning came in at 229,000, beating the 220,000 economists had expected. The data gives investors new clues about whether the economy can achieve the soft landing the Fed hopes for. But the countdown is on for Friday’s release of the monthly May payrolls report, which is expected to be crucial for stocks.

Among individual stocks, athleisure-wear maker Lululemon (LULU) rose 4% after the company raised its profit outlook and share-buyback program.

live8 Updates

  • Nvidia pulls back, market cap falls below $3 trillion

    Nvidia’s (NVDA) valuation fell below the $3 trillion mark on Thursday, the day after the company achieved the feat.

    The AI ​​chip giant’s shares started higher but quickly fell, falling more than 1% as of around 11:45 a.m. ET.

    Nvidia is emblematic of investor enthusiasm for artificial intelligence, which accelerated with OpenAI’s release of ChatGPT in late 2022, as reported by Yahoo Finance’s Dan Howley.

    Nvidia’s shares are up more than 140% since the beginning of the year.

    Please see here for the detail.

  • Oil prices rise as ECB cuts interest rates and Saudi Arabia signals openness to phasing out production cuts

    Oil prices rose on Thursday after the European Central Bank cut its key interest rate and OPEC leader Saudi Arabia said it still prioritized price stability, potentially reversing an earlier decision to phase out voluntary production cuts starting this year.

    West Texas Intermediate (CL=F) futures rose 0.8%, while the global benchmark Brent crude (BZ=F) also rose nearly 1%.

    Oil prices fell earlier this week following the decision by the oil coalition to keep most of its production cuts in place but phase out voluntary cuts from October. The market had widely expected all cuts to continue through 2024.

    The ECB cut its policy interest rate by 25 basis points on Thursday, as widely expected, for the first time since 2019.

    Lower interest rates tend to stimulate economic activity and increase demand for oil and gas.

  • Nvidia reverses previous day’s gains and turns negative

    Nvidia (NVDA) fell into negative territory after opening the session with a 2.6% gain.

    The stock hit an all-time high of $1,255.87 shortly after the market opened but then fell as much as 3% by 10 a.m. ET.

    Nvidia’s decline sends the Nasdaq Composite into negative territory

  • Nvidia Gains, Shares Steady

    U.S. stocks were little changed Thursday morning after tech rally drove the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) to record highs.

    AI industry darling Nvidia (NVDA) opened slightly higher after its market cap surpassed $3 trillion in the previous trading day.

    On Thursday morning, the S&P 500 and the Dow Jones Industrial Average (^DJI) were trading in ranges. The Nasdaq was up about 0.1%.

    Investors are focused on the highly anticipated jobs report, due to be released on Friday morning.

  • The commercial PC market is recovering

    In my opinion, having two makes it a trend.

    Recent performance from major PC makers suggests that the commercial PC market is finally recovering.

    Loop Capital’s John Donovan released a note this morning offering further insight into the emerging trend.

    “The more I look into this space, the more exciting the news and updates are, frankly. All the elements of an extended refresh cycle are in place, including the return to workplace principle being finalized, prolonged upgrades since the pandemic (which is also impacting the consumer side to some extent), and the Windows 10 to 11 rollover, which adds to the optimism. Add to this the simple fact that AI PC solutions will undoubtedly have a higher average selling price, especially on the commercial side, and the optimism appears realistic. Keep in mind that enterprise upgrades cannot take the “cheap route” as AI innovations will make “good enough solutions” obsolete. So we are seeing a roadmap to “overbuying” levels in the near future. More good news for PC OEMs.”

    Here’s what Enrique Lores, CEO of HP Inc. (HPQ), had to say about the recovery:

  • New faces on Walmart’s board

    It’s a meaningful new side hustle for one of the fast-food industry’s most popular CEOs.

    Chipotle (CMG) CEO Brian Niccol has been officially elected to Walmart’s (WMT) board of directors, becoming the fifth new independent director Walmart has appointed since 2017, CEO Doug McMillon said Wednesday morning ahead of the shareholder vote.

    Nicol replaces longtime director Rob Walton, son of Walmart founder Sam Walton, who retired on Wednesday.

    This isn’t Nicol’s first time serving on a board outside of Chipotle: he previously served on the boards of KB Home (KBH) and Harley-Davidson (HOG).

    The addition of Nicole makes a lot of sense.

    Chipotle and Walmart have both enjoyed success in recent years as price-conscious consumers seek out products that they perceive as saving them money. Nicol has also led Chipotle’s push into digital ordering, while McMillon has led a digital revival at Walmart.

    While other grocery chains struggled to retain customers last quarter, Chipotle’s efforts helped the company post a 7% increase in same-store sales.

    A similar trend was seen at Walmart, whose U.S. same-store sales increased 3.9% year over year.

    The burrito chain’s shares are up about 38% year to date, while Walmart’s shares are up more than 26%. It’s also worth noting that Walmart recently completed a 3-for-1 stock split, while Chipotle is awaiting shareholder approval for a 50-for-1 stock split.

  • Hey, before you get all excited about Lululemon quarters

    Bears dumped shares of Lululemon (LULU) ahead of last night’s earnings release, sending the stock up 9% premarket, even though the results weren’t that terrible.

    But this was by no means a typical Lululemon quarter (strong double-digit growth in each division), so the positive reaction may be overstated.

    What’s worrying is that sales at its US division were flat year over year. The company flagged lower-than-expected business with customers, which is typically not a good sign for future demand. (I used to cover the stock as an analyst, and trust me, it’s not a good indicator.)

    “We are advising investors to sell despite any strength as we believe Lululemon’s brand and fundamentals have peaked and expect stiff competition ahead,” Jefferies analyst Randall Konik said in a client note this morning.

    Konik reiterated his underperform rating on the stock.

    That makes a lot of sense.

  • Learning AI terminology is a good thing

    If you’re planning on investing in AI, it’s a good idea to understand the terminology.

    That includes me, who, although not investing in AI, writes about it far more than I would have thought possible 10 years ago.

    A chat with HPE (HPE) CEO Antonio Neri on Yahoo Finance Live provided some useful insight on the topic of “liquid cooling,” which is something we’ll likely be hearing a lot more about in the future, given the power new AI chips will be generating.

    I also found what Neri said about Nvidia (NVDA) interesting.



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