Stock market indices are mixed today due to weakness in technology stocks

The S&P 500 ($SPX) (SPY) is up +0.24% today, the Dow Jones Industrials ($DOWI) (DIA) is up +0.99%, and the Nasdaq 100 ($IUXX) (QQQ) is down -0.34%

Stock indices are mixed today. A surge in M&A activity today provided support for stocks after Sonoco Products agreed to buy Eviosys from KPS Capital Partners for about $3.9 billion. Also, RXO Inc. agreed to buy Uniter Parcel Service’s light freight brokerage business Coyote Logistics for more than $1 billion.

Weakness in technology stocks is weighing on the Nasdaq 100 and the overall market today as Truist Advisory Services downgraded the technology sector to neutral from overweight, citing valuation concerns.

Dovish comments today from Chicago Fed President Goolsbee supported stocks when he said it may be appropriate for the Fed to start thinking about whether tighter policy is putting too much pressure on the economy.

Markets are awaiting Friday’s release of the May US headline PCE deflator, the Fed’s preferred inflation gauge, to see if price pressures are easing, which could pave the way for the Fed to to start lowering interest rates. Consensus is that May’s core PCE deflator eased to +2.6% y/y from +2.8% y/y in April.

Markets are reducing the odds of a -25bp rate cut to 10% for the next FOMC meeting on July 30-31 and 64% for the next meeting on September 17-18.

Overall, positive Q1 earnings results are supportive for stocks. Q1 earnings are expected to rise +7.1% annually, well above the pre-earnings season estimate of +3.8%. About 81% of S&P 500 reporting companies beat first-quarter earnings estimates, according to data compiled by Bloomberg Intelligence.

Overseas stock markets are mixed today. The Euro Stoxx 50 is up +0.64%. China’s Shanghai Composite fell to a 3-3/4 month low and closed down -1.17%. Japan’s Nikkei Stock 225 index climbed to a one-week high to close +0.54%.

Interest rates

September 10-year T notes (ZNU24) are down -2 today. The 10-year note yield rose +0.2 bp to 4.257%. Banknotes are under pressure today from the negative carry from weakness in European government bonds. Also, supply pressures are weighing on TT notes as the Treasury will auction $211 billion of bag and floating-rate notes this week, starting with Tuesday’s $69 billion auction of 2-year notes. Banknote prices saw support after Chicago Fed President Goolsbee said the Fed should be wary of overly tight monetary policy.

European government bond yields are moving higher today. The German 10-year bond yield rose +1.4 bp to 2.426%. The UK 10-year walnut yield is up +0.4bp to 4.087%.

Germany’s June IFO business climate index unexpectedly fell -0.7 to 88.6 against expectations for an increase of 89.6.

ECB Executive Board member Schnabel said the risk of further inflation shocks meant the “ECB has not pre-committed to a fixed-rate path” and remained data-dependent.

Swaps are reducing the odds of a -25 bp rate cut by the ECB to 5% for the July 18 meeting and 66% for the September 12 meeting.

US stock movers

Meta Platforms ( META ) is up more than +2% after the Wall Street Journal reported that the company had held talks with Apple about integrating Facebook’s generative artificial intelligence model into Apple’s AI system, called Apple Intelligence.

International Business Machines (IBM) is up more than +2% to lead the gainers on the Dow Jones Industrials after Goldman Sachs initiated coverage of the stock with a buy recommendation and a $200 price target.

Target ( TGT ) is up more than +2% after announcing it will partner with Shopify to expand its marketplace to third-party merchants.

RXO Inc ( RXO ) is up more than +15% after agreeing to acquire the light freight brokerage business of United Parcel Service Coyote Logistics’ assets for over $1 billion.

Alnylam Pharmaceuticals ( ALNY ) is up more than +27% after it said its heart drug vutrisiran was successful in a late-stage study for patients with a serious heart condition known as AYYR amyloidosis with cardiomyopathy.

Trump Media & Technology Group ( DJT ) is up more than +9% after announcing late Friday, as markets closed, that it expects to receive more than $69.4 million in proceeds from the exercise of cash warrants last week .

Carrier Global ( CARR ) is up more than +1% as Citigroup upgraded the stock to buy from neutral with a $74 price target.

Planet Fitness ( PLNT ) is up more than +1% as TD Cowen called the stock a solid pick and upgraded it to buy from hold with a $92 price target.

ResMed ( RMD ) is down more than -8% for the top loser in the S&P 500 after Citigroup cut the stock to neutral from buy and said Eli Lilly’s Tirzepatide is a possible alternative to breathing machines in the treatment of obstructive sleep apnea. sleeping.

Weakness in chip stocks and AI hardware companies today is weighing on the broader market. Qualcomm ( QCOM ) is down more than -3% to see losers on the Nasdaq 100. Also, Nvidia ( NVDA ) and Super Micro Computer ( SMCI ) are down more than -2%. Applied Materials ( AMAT ), KLA Corp ( KLAC ), Lam Research ( LRCX ), Microchip Technology ( MCHP ), and Marvell Technology ( MRVL ) are down more than -1%.

Cryptocurrency stocks are under pressure today, with the price of Bitcoin (^BTCUSD) down more than -4% to a 6-week low. As a result, Coinbase Global ( COIN ), Marathon Digital ( MARA ), Riot Platforms ( RIOT ), and MicroStrategy ( MSTR ) have fallen more than -3%.

Earnings Reports (24.6.2024)

Beyond Air Inc (XAIR), Eagle Pharmaceuticals Inc/DE (EGRX), Enerpac Tool Group Corp (EPAC), Luna Innovations Inc (LUNA).

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As of the date of publication, Rich Asplund had no positions (directly or indirectly) in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more information, please see Barchart’s Disclosure Policy here.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.