FILE – Specialist Michael Pistillo, left, and trader Robert Chermack work on the floor of the New York Stock Exchange, May 30, 2024. Global stocks started June mostly higher as reports that U.S. inflation was not worsening helped spur gains on Wall Street. (AP Photo/Richard Drew, File)
NEW YORK (AP) — U.S. stock markets ended mixed on Monday after the latest signs of a slowdown in the U.S. economy.
The S&P 500 rose 5.89 points, or 0.1%, to 5,283.40 despite declines across most of the index’s stocks. The Dow Jones Industrial Average fell 115.29 points, or 0.3%, to 38,571.03 and the Nasdaq Composite rose 93.65 points, or 0.6%, to 16,828.67.
Treasury yields also fell in the bond market after the Institute for Supply Management reported that U.S. manufacturing contracted for the 18th time in 19 months in May, a figure that has been hit particularly hard by high interest rates aimed at taming high inflation.
“Demand remains uncertain as current monetary policy and other factors make companies reluctant to invest,” said Timothy Fiore, chairman of the manufacturing research committee at the Institute for Supply Management.
Shares of companies whose profits are closely tied to the strength of the economy suffered the market’s worst declines, including in the oil and gas sector, where crude prices have plummeted on concerns that growth in fuel demand will slow.
Halliburton fell 5.3% and Exxon Mobil dropped 2.4%. Both stocks fell after the price of a barrel of U.S. crude fell 3.5%. International standard Brent crude fell by a similar amount despite efforts by Saudi Arabia and other producers over the weekend to shore up prices.
Among the winners on Wall Street were several big technology stocks that continue to rise regardless of the economic climate.
Nvidia rose another 4.9% after unveiling new products and services over the weekend, bringing its gains this year to 132.2%. The company is riding high on its explosive gains as it fends off criticism that investors are getting too enthusiastic about the prospects for AI. So far, Nvidia has been one of the biggest drivers of the S&P 500’s gains.
The gains were even bigger in another corner of Wall Street, accustomed to stomach-churning ups and downs.
GameStop soared 21%, in a move reminiscent of the early 2021 surge that shook Wall Street and brought the term “meme stock” into modern parlance.GameStop’s surge came after a Reddit account linked to a central figure in the 2021 episode said the company held 5 million shares, plus options to buy more.The position was worth $181.4 million, according to a post Sunday night.
The post caused a stir online because it was the same Reddit account that posted a similar screenshot of a large holding in GameStop in 2021. The post sent shares of the struggling video game retailer soaring far beyond what many critics on Wall Street called reasonable.
“Meme stocks” has become a catchphrase for companies whose shares are driven by the enthusiasm of small investors rather than any fundamental change in their business prospects. Other meme stocks also rose on Monday, including AMC Entertainment, up 11.1%.
In a more traditional move for the market, shares of Stericycle rose 14.6% after Waste Management said it would buy medical-waste treatment company Stericycle for $5.8 billion in cash and assume $1.4 billion in net debt. Waste Management shares fell 4.5%.
Hertz Global’s shares fell 5.3% after the company said its chief operating officer had stepped down and it had appointed a new chief financial officer.
In the bond market, the yield on the 10-year Treasury note fell to 4.39% from 4.50% late on Friday. The yield on the two-year note, which more closely reflects expectations for Federal Reserve action, fell to 4.81% from 4.88%.
Investors are hoping that the U.S. economy will slow just enough to keep inflationary pressures in check, but not so much as to trigger a recession, which could allow the Federal Reserve to cut its key interest rates.
The Federal Reserve has kept the federal funds rate at its highest level in the last 20 years while intentionally slowing the economy and causing investment prices to fall in the hopes of suppressing high inflation once and for all.
Several highly-watched economic reports are due to be released this week, which could cause further sharp movements in yields.
The U.S. government will report on Tuesday how many job ads companies had open at the end of April, and on Friday it will release its latest monthly report on overall growth in employment and worker wages.
Among international stock markets, India’s Sensex index rose 3.4 percent after a six-week general election concluded with most exit polls predicting Prime Minister Narendra Modi would win a third consecutive 10-year term in power.
Meanwhile, Mexican stocks fell 6% after Claudia Scheinbaum declared victory in the country’s presidential election.
Elsewhere around the world, stock indexes rose across much of Europe and Asia, with Shanghai and London being the exceptions.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
