US Stock Market Overview – Indices Were Mixed, Weighed Down by Technology Shares

Investigations into Facebook Apple and Alphabet weigh on technology shares
David Becker
U.S. Dollar Index

US stocks traded under pressure on Monday weighed down by declines in the technology sector. Technology shares tumbled Monday, hit by fears that regulators might take a fresh shot at industry giants such as Apple, Alphabet, and Facebook. The Nasdaq was the worst performing sector and is now down 10% off its highs back into correction territory.

Sectors were mixed, with technology shares weighing on the broader index. Materials bucked the trend. Gold producers were the best performers as gold prices rallied on continued concerns over global economic growth. Dow Dupont was the best performing stock in the sector following a stock split. If the Trump administration levies a 5% tariff on Mexico at the end of the week, markets will begin to prices in expected declines in US growth.

Technology Shares Tumble

Stocks began the day unchanged but then fell to session lows around midday as a report that the Federal Trade Commission could sue for potential antitrust tech giants like Facebook which sent technology shares skidding. Facebook slid nearly 8%, while lost nearly 5% and Alphabet fell almost 7% to erase its gains for the year.

Bond Yields Collapse

The US 10-year yield collapsed on Monday and continues to point to a recession. The yield curve is inverted with the 3-month Tbill yield above the 10-year treasury by nearly 25-basis points. German bond yields drifted lower after the chairwoman of Chancellor Angela Merkel’s junior coalition partner stepped down, adding to uncertainty over the government in Berlin.

US Manufacturing Slips

US ISM manufacturing came in softer than expected to hit the lowest level seen in more than 2-years. The ISM manufacturing index fell to 52.1 for May, compared to expectations for 53. The big detractors came in supplier deliveries, which slumped 2.6 percentage points to 52, and inventories, which declined 2 percentage points to 50.9. Construction spending also disappointed, with a flat reading compared to expectations for a 0.4% growth in April.

The Apple Developer Conference Describes Security

Apple announced on Monday said its next mobile operating system, iOS 13, which it will release this fall, will include an Apple sign-in capability that allows people to log into apps without revealing any personal information. It said the system produces an automatically generated random email address provided by Apple. This appears to be the main security feature discussed at the conference.

Dow Dupont Split

Three years after initially floating the idea Dow, DuPont and Corteva are now three separate companies. Corteva, which was officially spun off Monday, declined Monday. Its shares are trading down 8%. The stock ticker DD which as the former name of the combined company and now is just Dupont rallied 14.6%.

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