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Nasdaq 100, Dow Jones, S&P 500 News: Mixed After Positive PPI Data; Broadcom Shares Surge

By:
James Hyerczyk
Updated: Jun 14, 2024, 18:48 GMT+00:00

Key Points:

  • S&P 500 rises as new data suggests easing inflation pressures, boosting investor confidence.
  • The Federal Reserve keeps interest rates unchanged, noting progress in inflation control and adjusting 2024 rate cut expectations.
  • Broadcom reports strong fiscal second-quarter results and announces a 10-for-1 stock split, sending shares up nearly 14%.
Dow Jones, Nasdaq-100, S&P 500 Index

In this article:

S&P 500 Rises After Encouraging Inflation Data

The S&P 500 advanced on Thursday as new economic data suggested inflation pressures are easing. The  Nasdaq is also edging higher, while the Dow drifted lower.

At 14:23 GMT, the Dow Jones Industrial Average is trading 38497.94, down 214.27 or -0.55%. The S&P 500 Index is at 5418.15, down 2.88 or -0.05% and the Nasdaq is trading 17651.42, up 42.99 or +0.24%.

Economic Reports

May’s producer price index (PPI) fell by 0.2% from the previous month, defying expectations of a 0.1% increase forecasted by economists polled by Dow Jones. This report followed Wednesday’s consumer price index (CPI) data, which showed less-than-expected inflation growth for May.

Additionally, the Federal Reserve announced its decision to keep interest rates unchanged. Despite this, the Fed acknowledged progress in controlling inflation and adjusted its forecast for 2024, lowering its expected rate cuts from three to one. Although the Fed did not change its policy, it hinted at potential rate cuts later this year, depending on economic developments.

Stocks on the Move

Broadcom shares surged nearly 14% after surpassing fiscal second-quarter earnings and revenue expectations and announcing a 10-for-1 stock split. The chipmaker reported adjusted earnings per share of $10.96, exceeding the $10.84 predicted by analysts, and revenue of $12.49 billion, higher than the anticipated $12.03 billion.

Tesla shares rose 6% after CEO Elon Musk indicated that his $56 billion pay package and the company’s incorporation move to Texas were expected to pass a shareholder vote. Despite some criticism and opposition from notable shareholders regarding the compensation plan, the vote appears to be in Musk’s favor.

Conversely, Dave & Buster’s Entertainment saw its shares drop 10% following a disappointing first-quarter revenue report. The company posted $588 million in revenue, falling short of the $621 million projected by analysts.

Other Notable Moves

Oxford Industries’ shares fell 4% after reporting weaker-than-expected earnings. The clothing manufacturer, parent to Tommy Bahama, announced adjusted earnings of $2.66 per share on $398.2 million in revenue, missing analysts’ estimates of $2.68 per share and $404.8 million in revenue. Guidance for the current quarter and the full year also came in below expectations.

Virgin Galactic’s stock declined by 8.5% after the company’s board approved a 1-for-20 reverse stock split. Meanwhile, Kimberly-Clark saw a 2.2% rise following a double upgrade to “buy” from Bank of America, which cited imminent structural changes for the Huggies and Kleenex maker.

NextEra Energy Partners’ shares dropped 3.2% after Barclays downgraded the stock to “underweight” from “equal weight,” citing challenges from convertible equity portfolio financing. Corning also experienced a 1% decline following a Morgan Stanley downgrade to “equal weight” from “overweight,” reflecting a more balanced risk-reward outlook after a significant rally this year.

Market Forecast

Given the encouraging inflation data and the Fed’s cautious optimism, the S&P 500 is likely to maintain its upward momentum in the near term. However, market volatility may persist as investors continue to assess inflation trends and potential Fed rate adjustments.

Technical Analysis

Daily E-mini S&P 500 Index

E-mini S&P 500 Index futures are edging lower on Thursday after giving up earlier gains. Sellers came in shortly after the cash market opening as the index approached yesterday’s record high at 5519.50.

The nearest support is the 50-day moving average at 5295.93, which means any pullback is likely to be read as a correction in a bull market. Long investors don’t have to worry about a change in the trend unless the 50-day MA is violated with conviction.

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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