Stan Cho, The Associated Press
7 minutes ago
FILE – Specialist James Denaro works his duties on the floor of the New York Stock Exchange, June 12, 2024. Global stocks were mixed on Friday, June 14, 2024, as Wall Street hit new records and enthusiasm for artificial intelligence technology drove benchmarks higher. (AP Photo/Richard Drew, File)
NEW YORK (AP) — U.S. stocks hovered near record highs on Friday as Wall Street was relatively quiet after another sell-off in Europe.
The S&P 500 fell less than 0.1%, missing a new all-time high for the first time this week. The Dow Jones Industrial Average fell 57 points, or 0.1%, while the Nasdaq Composite Index was up 0.1% from its record set the previous day, helped by gains in technology stocks.
The declines were even bigger across the Atlantic, where markets have been shaken by the results of recent European elections. The victory of a far-right party has increased pressure on the French president in particular, and investors worry that it could weaken the European Union, stall fiscal plans and ultimately reduce France’s ability to repay its debts. Recent elections have also rattled markets in other countries, including Mexico and India.
France’s CAC 40 index fell 2.7%, taking its weekly decline to 6.2% for its worst drop in more than two years, while Germany’s DAX index fell 1.4%.
On Wall Street, RH fell 17.1% after reporting a worse loss for its latest quarter than financial analysts had expected, in what the home furnishings retailer called “the toughest housing market in 30 years.”
Rising mortgage rates are hurting the housing market as the Federal Reserve keeps its key interest rate at its highest in more than two decades. The central bank is artificially keeping interest rates high to slow the economy in an attempt to dry up the fuel for high inflation.
Cruise lines were the market’s biggest losers after analysts at Bank of America said cruise prices were on the decline. Norwegian Cruise Line fell 7.5%, the biggest drop in the S&P 500. Carnival fell 7.1%.
Still, stocks are hitting records on growing hopes that inflation is slowing and the Federal Reserve will cut interest rates later this year, while big technology stocks continue to soar, largely unaffected by what’s happening in the economy or interest rates.
Adobe reported that its latest quarterly profit beat analyst expectations, sending its shares up 14.5%.
Broadcom Inc. rose 3.3% for a second straight day after it reported better-than-expected profits and announced a 10-for-1 stock split to make its shares more affordable. Nvidia Inc., a poster child for a rapid entry into artificial intelligence technology, rose 1.8% as its market capitalization rose further to more than $3 trillion.
As has been almost customary recently, Nvidia was the strongest driver of the S&P 500’s gains, followed by Adobe and Broadcom.
Overall, the S&P 500 fell 2.14 points to 5,431.60, the Dow lost 57.94 points to 38,589.16 and the Nasdaq Composite added 21.32 points to 17,688.88.
In the bond market, Treasury yields edged lower after a preliminary report from the University of Michigan suggested U.S. consumer sentiment did not improve this month as economists had expected.
While strong spending by U.S. households is one of the main drivers of averting a recession, “somewhat increased concerns about rising prices and lower incomes led to lower ratings of personal financial situations,” said Joan Hsu, director of the Bureau of Consumer Research.
Perhaps more importantly for financial markets, U.S. consumers’ expectations of future inflation, while relatively high, appear to have changed little — an encouraging signal that the economy may be able to avoid a self-fulfilling cycle in which expectations of higher inflation spur behavior that creates even more inflation.
The yield on the 10-year Treasury note fell to 4.21% from Thursday’s close of 4.25%. It had risen to as high as 4.60% late last month before several encouraging reports on inflation.
Overseas stock markets, Asian stock indexes were mixed. Japan’s Nikkei rose 0.2 percent after the central bank kept interest rates unchanged.
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AP Business Writer Yuri Kageyama contributed.
