Stock Market News Today: Markets mixed as Apple surge counters financial stocks (SP500)

Jun 11, 2024

Wall Street on Tuesday was largely muted, as a slump in financial stocks offset a surge in Apple (AAPL).

Market participants are also being cautious, a day ahead of two major events – the release of consumer inflation data for May and the Federal Reserve’s latest monetary policy rate decision.

The blue-chip Dow (DJI) slipped 0.64% to 38,618.12 points in midday trade, weighed down by financial components American Express (AXP) and JPMorgan (JPM). Meanwhile, the benchmark S&P 500 (SP500) retreated from a record close notched in the previous session, falling 0.30% to 5,344.95 points.

The tech-heavy Nasdaq Composite (COMP:IND) seesawed, last down 0.01% to 17,190.37 points. Apple (AAPL) gave a boost after the tech giant’s stock scaled an intraday peak for the first time since December last year. The Tim Cook-led firm impressed investors and analysts with its artificial intelligence offerings at its annual developers conference.

All 11 S&P sectors were in the red with the exception of Technology, with Financials down more than 1%.

The focus remains largely on the Fed, with the central bank widely expected to hold interest rates steady on Wednesday when it issues its decision at 1400 ET. More importantly, Wall Street will be paying attention to the Fed’s updated dot plot, or its so-called Summary of Economic Projections (SEP).

Labor market data last week showed the kind of trend that the Fed wants to see – softening jobs and a tick up in unemployment. That also helped slightly bump up rate cut expectations.

“Stocks and bonds rallied hard last week after seeing April’s inflation data as somewhat positive news that support possible rate cuts later this year. The latest U.S. jobs results were fairly benign with respect to average hourly earnings and tempering of monthly payroll gains. Price increases seen in the U.S. services sector may be stickier than thought,” Turning Rock Partners said.

“Markets are anticipating an impending Fed pivot but an elegant soft landing from restrictive interest rate policy may prove more difficult than we expected,” the private investment firm added.

Ahead of the Fed decision, markets will also receive the consumer price index (CPI) report for May. Core CPI is expected to rise 0.3% M/M, which would match April’s reading. On an annual basis, core CPI is anticipated to increase 3.5%, which would still be above the Fed’s 2% target but would mark a slight moderation from the previous month.

“The Fed’s catch-22: They don’t want to cut without more convincing evidence their policy stance is as restrictive as they think it is. But some are uneasy it will be too late to avoid an employment downturn by the time they see the evidence,” the Wall Street Journal’s Fed watcher Nick Timiraos said on X (formerly Twitter).

“But, but, but … Rarely is there a meeting where the data released on the morning of the meeting could influence the thing that everyone will watch at 2 p.m. That’s the case Wednesday, when the release of the May CPI could move one or two rate projections in the SEP,” Timiraos added.

Turning to the fixed-income markets, U.S. Treasury yields were lower on Tuesday. The longer-end 30-year (US30Y) and 10-year yields (US10Y) were both down about 1 basis point each to 4.59% and 4.46%, respectively. The shorter-end more rate-sensitive 2-year yield (US2Y) was down 2 basis points to 4.87%.

See live data on how Treasury yields are doing across the curve at the Seeking Alpha bond page.

Among other active stocks, General Motors (GM) was a top percentage gainer on the S&P 500 (SP500). The “Detroit Three” carmaker’s board approved a new $6B stock buyback program.

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