Chip stocks boost market, positive earnings results, pending Fed rate cut clues

From Nasdaq: 2024-05-28 18:34:11

US stock indexes closed mixed on Tuesday, with the S&P 500 slightly up and the Dow Jones down, hitting a 3-week low. Chip stocks, boosted by a 6% jump in Nvidia, led the market higher. Unexpected increase in May consumer confidence supported the economy. Expectation of Fed rate cuts dampened by remarks on inflation by Minneapolis Fed President. Increased M&A activity with Energy Transfer, T-Mobile, and Hess Corp deals is supporting stocks. Positive Q1 earnings results also buoying the market, with a 7.1% y/y increase in earnings and 81% outperforming expectations. Market awaiting April PCE core deflator release for Fed rate cut clues.

European government bond yields rise moderately on Tuesday, with German bund yield up 4.5 bp to 2.592% and UK gilt yield up 2.0 bp to 4.281%. ECB member comments indicate confidence in bringing consumer price growth back to 2%. US stock movers include Moderna down over 8%, Zscaler over 4% after downgrade, Pentair down more than 3%, Lululemon down over 2%, PepsiCo down over 2%, DraftKings down over 10%. Nvidia jumped over 6% on strong earnings report and upbeat forecasts. Norwegian Cruise Line, Deckers Outdoor, Dell, Airbnb, Arcturus Therapeutics, Insmed were among the top gainers.

Earnings reports on 5/29/2024 include Advance Auto Parts, Agilent Technologies, Capri Holdings, Dick’s Sporting Goods, HP, nCino, Nutanix, Okta, Pure Storage, Salesforce, U-Haul Holding, and UiPath. The ECB reports indicate moderate easing of CPI expectations. T-note yields rise moderately after early advance, with 10-year yield at 4.538%. The markets are discounting chances for a -25 bp rate cut at 0% for the June 11-12 FOMC meeting and 10% for the July 30-31 meeting. Overseas stock markets close lower, with Euro Stoxx 50 down 0.57%, China’s Shanghai Composite down 0.46%, Japan’s Nikkei down 0.11%.



Read more at Nasdaq: Stocks See Support from Chip Stocks But T-Note Yield Rises