Wall Street rises to more records as big tech stocks keep climbing
NEW YORK — U.S. stocks rose to records Monday as gains for technology companies keep pushing the market higher.
The Standard & Poor’s 500 climbed 0.8% to top its all-time high set on Thursday. The Dow Jones industrial average gained 188 points, or 0.5%, while the Nasdaq composite added 1% to its own record.
Autodesk jumped 6.5% for one of the market’s biggest gains after an investment firm said it will try to delay the software company’s annual meeting so it can nominate new directors for the board. Starboard Value also outlined how it says Autodesk hasn’t performed as well financially as it should have. In response, Autodesk said it will review Starboard’s suggestions but added that it has “a clear strategy that is working.â€
Close behind Autodesk was chip company Broadcom, which rose 5.4% to add to gains from last week after it reported better profit than expected and said it would undergo a 10-for-one stock split to make its price more affordable. Broadcom followed Nvidia, the company that’s become the poster child of Wall Street’s frenzy around artificial intelligence technology and just executed a similar split.
Broadcom was one of the strongest forces pushing the S&P 500 upward, along with a 2% rise for Apple and 1.2% climb for Microsoft.
Continued momentum for Big Tech stocks, along with easing pressure on inflation, has investors “cheering the ‘glass half full’ outlook†instead of focusing on the struggles of lower- and middle-income Americans and other challenges, said Anthony Saglimbene, chief market strategist at Ameriprise.
Super Micro Computer, which sells server and storage systems used in artificial intelligence and other computing, leaped 5.1% to bring its gain for the year to 212.2%. It’s also part of the supernova around AI that’s been overshadowing almost everything else on Wall Street.
The gains for tech helped offset pressure on the stock market caused by rising Treasury yields in the bond market. The climb in yields erased some of the slack created last week when better-than-expected reports on inflation raised hopes that the Federal Reserve will cut interest rates this year.
This week has few top-tier economic reports for the United States outside of Tuesday’s update on how much customers are spending at U.S. retailers and Friday’s preliminary look at the state of U.S. business activity. Markets will also be closed Wednesday for the Juneteenth holiday.
A report on Monday said manufacturing in New York state is still contracting, though not by as much as economists expected. Manufacturing has been one of the areas hit hardest by the Federal Reserve’s zeal to keep its main interest rate at the highest level in more than two decades.
The Fed is trying to hold rates high for long enough to slow the economy and snuff out high inflation, but it wants to cut rates and reverse the momentum before the slowdown evolves into a painful recession.
High interest rates hurt all kinds of investments, and they tend to hit some areas particularly hard. Utilities in the S&P 500 fell 1.1% for Monday’s largest loss among the 11 sectors that make up the index. They often get hurt when bonds are paying more in interest and drawing away income-seeking investors who would otherwise gravitate to dividend-paying utility stocks.
GameStop was another laggard and fell 12.1% after its annual shareholder meeting. The stock has been soaring and sinking as it rides waves of enthusiasm by smaller-pocketed investors. At the meeting, Chief Executive Ryan Cohen said the struggling video game retailer will focus on cutting costs, which would involve a “smaller network of stores.â€
All told, the S&P 500 rose 41.63 points to 5,473.23. The Dow gained 188.94 to 38,778.10, and the Nasdaq composite jumped 168.14 to 17,857.02.
In the bond market, the yield on the 10-year Treasury climbed to 4.28% from 4.22% late Friday. The two-year Treasury yield, which more closely tracks expectations for the Fed, rose to 4.76% from 4.71%.
In stock markets abroad, European indexes calmed somewhat after last week’s rout. France’s CAC 40 rose 0.9% following its worst week in two years on worries that potential electoral losses by the president’s centrist party could lead to sharply higher debt for the country.
The modest gains for Europe followed losses in Asia. Japan’s Nikkei 225 dropped 1.8%.
Choe writes for the Associated Press
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