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Nasdaq 100, Dow Jones, S&P 500 News: Chipmakers Drive Market Higher; Broadcom Hits Record

By:
James Hyerczyk
Updated: Jun 18, 2024, 14:35 GMT+00:00

Key Points:

  • S&P 500 and Dow show gains while Nasdaq dips slightly as retail sales data underwhelms. Investors remain watchful of consumer spending trends.
  • Nvidia and Broadcom stocks rise by 1%, with Qualcomm and Taiwan Semiconductor gaining 2.5%. Micron Technology surges 5%.
  • Federal Reserve officials' speeches today may provide insights into future monetary policy. Traders hope for hints on potential rate cuts.
Nasdaq 100, Dow Jones, S&P 500 News

S&P 500 Edges Up Despite Weak Retail Sales Data

The S&P 500 inched higher on Tuesday as investors evaluated consumer health in light of disappointing retail sales figures. Meanwhile, the Dow also moved upward, while the Nasdaq experienced a slight decline.

At 14:17 GMT, the Dow Jones is trading 38801.13, up 23.03 or +0.06%. The S&P 500 Index is at 5482.39, up 9.16 or +0.17% and the Nasdaq-100 Index is trading 17869.08, up 12.06 or +0.07%.

Retail Sales Disappointment

Retail sales for May rose just 0.1%, falling short of the 0.2% growth anticipated by economists. Year-over-year, sales increased by 2.3%. The modest growth in retail sales raised concerns about consumer spending’s impact on the ongoing bull market. Investors are closely monitoring consumer activity as it is crucial for sustaining market momentum.

Impact on Treasury Yields and Stocks

Following the retail sales report, Treasury yields declined, providing some relief to stock prices. Investors are hopeful that slower economic growth might prompt the Federal Reserve to consider rate cuts. Despite the lackluster retail data, corporate profits and economic expansion have continued to support rising stock prices.

Chipmakers Lead Market Gains

Nvidia and Broadcom continued their impressive performance, each gaining approximately 1%. The rally in these semiconductor stocks spilled over to others in the sector, with Qualcomm and Taiwan Semiconductor both increasing by 2.5%. Micron Technology saw a significant 5% rise.

Broadcom’s Record Rally

Broadcom shares rose another 1.5% in premarket trading, building on a 5.4% rally from Monday. The company’s stock has been on an upward trajectory since surpassing quarterly earnings estimates and announcing a 10-for-1 stock split. Year-to-date, Broadcom has surged around 64%.

Sector Performance

Energy stocks led sector gains, rising 1.35%, while the technology sector followed with a 0.43% increase. Other sectors showed mixed performance: Financials gained 0.24%, Health added 0.17%, and Real Estate was up 0.29%. In contrast, Consumer Discretionary, Consumer Staples, Industrials, and Materials sectors experienced slight declines.

Federal Reserve Outlook

Several Federal Reserve officials, including Boston Fed President Susan Collins and Richmond Fed President Tom Barkin, are scheduled to speak throughout the day. Their remarks will be closely watched for insights into future monetary policy moves.

Market Forecast

Given the mixed retail sales data and the ongoing strength in key technology stocks, the market outlook remains cautiously optimistic. The potential for Federal Reserve rate cuts, combined with robust corporate earnings, could support continued market gains. However, sustained consumer spending will be critical to maintaining this bullish trend. Traders should watch for further economic indicators and Fed commentary for direction.

Technical Analysis

Daily E-mini S&P 500 Index

E-mini S&P 500 Index futures are edging higher on relatively low volume. Wednesday is a market holiday so this trend in volume could continue throughout the day. This tends to happen when a major holiday occurs in the middle of the week.

Nonetheless, the benchmark is still in a position to post a new all-time high. Even if there is a short-term pullback, the trend is not likely to be threatened with the 50-day moving average providing support at 5310.24, followed by the swing bottom at 5205.50.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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