Stan Cho, The Associated Press
1 hour ago
FILE – A sign at the New York Stock Exchange in New York, June 18, 2024. Global stocks are mostly lower after Wall Street tumbled, Friday, June 21, 2024. A drop in Nvidia shares helped drag down stock prices. (AP Photo/Peter Morgan, File)
NEW YORK (AP) — U.S. stocks were heading for a quiet end to the weekend on Friday as Nvidia Inc.’s shares continued to cool off from their stunning supernova burst.
The S&P 500 was down 0.2% in midday trading but remains near the all-time high it hit on Tuesday. The Dow Jones Industrial Average was down 40 points, or 0.1%, as of 11:30 a.m. Eastern time, and the Nasdaq Composite was little changed.
Nvidia Inc. again dragged the market down after falling 2%. The company’s shares have soared more than 1,000% since October 2022 on frenzied demand for its chips that underpin much of the world’s move toward artificial intelligence technology, briefly overtaking Microsoft this week to become Wall Street’s most valuable company.
But nothing goes up forever, and Nvidia’s shares have fallen over the past two days, bringing them to their first declining week in the last nine weeks.
Most of the rest of Wall Street was relatively quiet, with a few exceptions.
Sarepta Therapeutics shares rose 36.1% after U.S. regulators approved the company’s drug for use in children ages 4 and older with Duchenne muscular dystrophy.
CarMax rose 1.8% after reporting its latest quarterly profit that slightly beat analysts’ expectations.
Gun maker Smith & Wesson Brands Inc. fell 11.3% despite reporting profits for its latest quarter that beat analysts’ expectations. Chief Executive Mark Smith said summer is traditionally a slow season for firearms sales.
Trump Media & Technology Group Inc. shares fell 4.8%, bringing its loss for the week to 31.3%. Shares of the company that runs Donald Trump’s Truth social platform have nearly halved since Trump’s conviction in late May for paying hush money to a porn actor who allegedly had sex with two men and tried to illegally influence the 2016 presidential election.
Wall Street trading can see a lot of movement throughout the day as a wide range of futures and options contracts to buy stocks and other investments expire.
In bond markets, U.S. Treasury yields initially fell after reports showed economic activity in euro zone countries was weaker than economists had expected. In continental Europe, worries are already building ahead of French elections that could further destabilize financial markets.
The weak business activity report pushed down European yields and initially weighed on U.S. Treasury yields, but then a separate report suggested U.S. business activity may be stronger than expected, allowing Treasury yields to recover much of their losses.
A preliminary survey of U.S. manufacturing and service activity released by S&P Global showed that aggregate production growth hit its highest level in 26 months. Perhaps more importantly for Wall Street, the strength is likely occurring without any rising inflationary pressures.
“Historical comparisons suggest that this decline brings the survey’s price index in line with the Fed’s 2% inflation target,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.
The Federal Reserve is in a precarious position, trying to slow the economy with high interest rates enough to bring high inflation down to 2%. The key is to lower interest rates at the right time. Wait too long and the economic slowdown could turn into a recession. Lower it too soon and inflation could re-accelerate.
Hope remains rife among traders that the Fed can get it done, with many predicting at least two rate cuts later this year, according to data from CME Group. Of course, those predictions have proven overly optimistic many times throughout history.
Fed officials expect to cut their key interest rate, which is at its highest in more than two decades, once or twice in 2024. The economy is still growing but is slowing under the weight of high interest rates, housing and manufacturing have been hit and low-income households are still struggling to keep up with rising prices.
The yield on the 10-year Treasury note was steady at 4.26%, while the yield on the two-year note was unchanged at 4.74%.
Overseas, European stocks fell on weak European economic data, and many Asian indexes also fell. Hong Kong’s Hang Seng Index fell 1.7% and South Korea’s KOSPI dropped 0.8%.
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AP Business Writer Yuri Kageyama contributed.
