Nasdaq jumps as Nvidia turns a corner

US stocks held broadly steady on Tuesday with AI chipmaker Nvidia (NVDA) eyeing a cautious comeback from a three-day skid as investors squared away their portfolios for the quarter’s end.

The tech-heavy Nasdaq Composite (^IXIC) moved up roughly 0.7%, while the benchmark S&P 500 (^GSPC) rose 0.2%. The Dow Jones Industrial Average (^DJI) remained the only major index in the red, slipping about 0.3% after surging over 200 points to start the week.

Stocks are looking brighter after the Nasdaq and S&P 500 took a bruising as Nvidia’s slide dented the tech rally that has powered gains this year. Investors are seen as taking profits scored in AI-linked names as a stellar quarter draws to a close, raising the question of whether recent losses have further to go.

Shares in the AI darling rose over 3% in early trading, coming off a fall of over 6% on Monday.

At the same time, the Dow looks to be finding its feet amid the shift from techs to value stocks, giving weight to the idea of a broadening in gains to other sectors.

Elsewhere, the wait is on for Friday’s update to the Personal Consumption Expenditures (PCE) index, a favored inflation input for the Federal Reserve. Governor Michelle Bowman on Tuesday stressed she’s willing to hike interest rates if holding them steady fails to bring price pressures under control.

On the economic data front, home prices set a new record high in April although annual growth slowed from the previous month, according to the S&P CoreLogic Case-Shiller report.

Meanwhile, a reading on consumer confidence highlighted cracks in previous resilience. According to the latest reading from the Conference Board, the index came in at 100 for the month of June, below the 101.3 seen in May. The results were in line with what economists surveyed by Bloomberg had expected.

“Confidence pulled back in June but remained within the same narrow range that’s held throughout the past two years, as strength in current labor market views continued to outweigh concerns about the future,” Dana M. Peterson, chief economist at The Conference Board, said in the data’s release. “However, if material weaknesses in the labor market appear, Confidence could weaken as the year progresses.”

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Tue, June 25, 2024 at 7:04 AM MST

Consumer confidence dips slightly in June

Consumer confidence declined slightly in June, putting a halt to any signs of a rebound.

The latest index reading from the Conference Board was 100, below the 101.3 seen in May and in line with the 100 economists surveyed by Bloomberg had expected.

“Confidence pulled back in June but remained within the same narrow range that’s held throughout the past two years, as strength in current labor market views continued to outweigh concerns about the future. However, if material weaknesses in the labor market appear, Confidence could weaken as the year progresses,” said Dana M. Peterson, chief economist at The Conference Board.

Peterson added: “Consumers expressed mixed feelings this month: their view of the present situation improved slightly overall, driven by an uptick in sentiment about the current labor market, but their assessment of current business conditions cooled.”

Tue, June 25, 2024 at 6:34 AM MST

Opening bell: Nasdaq jumps, Dow slips

US stocks opened mixed on Tuesday as AI chipmaker Nvidia (NVDA) eyed a cautious comeback from a three-day skid, rising more than 0.2% in early trading.

The tech-heavy Nasdaq Composite (^IXIC) moved up roughly 0.5%, while the benchmark S&P 500 (^GSPC) rose 0.2%. The Dow Jones Industrial Average (^DJI) remained the only major index in the red, slipping about 0.2% after surging over 200 points to start the week.

Tue, June 25, 2024 at 6:23 AM MST

Home prices hit new record in April

Home prices set a new record high in April as the market remains tight. But annual growth slowed from the previous month.

Home prices in the 20 largest US metros increased 7.2% in the last 12 months ending in April, lower than the 7.5% annual gain in the previous month, according to the S&P CoreLogic Case-Shiller. On a monthly basis, home prices across the 20 biggest cities increased 0.4% in April compared to the previous month.

Low inventory, high mortgage rates, and record home prices have put the housing market out or reach for many would-be buyers. Economists at Bank of America believe that housing hurdles aren’t going away anytime soon.

“The US housing market is stuck, and we are not convinced it will become unstuck anytime soon,” Michael Gapen, an economist at Bank of America, wrote in a note to clients on Monday.

“After a surge in housing activity during the pandemic, it has since retreated and stabilized. We view the forces that have reduced affordability, created a lock-in effect for homeowners, and limited housing activity will remain in place through our forecast horizon,” the economist added.

To this point, the investment bank believes that the pandemic housing shocks still have to pass through the market. Bank of America expects home prices to rise by about 4.5% this year and 5.0% next year, but then fall back to 0.5% in 2026.

Tue, June 25, 2024 at 3:40 AM MST

One key market risk for 2025

As if you need another money thing to worry about.

In an exclusive interview with Yahoo Finance’s Jennifer Schonberger late Monday, US Treasury Secretary Janet Yellen reminded investors that the Trump tax cuts are set to expire in 2025.

I can’t think of the last investor I talked to who expressed a concern about the expiration and how it may impact markets.

But Yellen did her best job to bring this back into the light:

“The signature policy from the Trump years was the Tax Cut and Jobs Act, and it promised an investment boom which really did not materialize. It gave huge tax breaks to corporations and to wealthy individuals. And it resulted in an enormous increase in the deficit and lowered tax revenues below historic norms. And I think it’s responsible for many of the problems that we face now with our fiscal trajectory. And so that would concern me to leave all of that in place.”

How the markets will react in 2025 should the tax cuts not get extended due to deficit concerns is of course wildly unknown today. It shouldn’t be ignored in your investment planning process, however. Consider this alone: No tax cut extension would mean the top tax rate would return to 39.6% from 37%.

That’s real money for real people.

You can watch Jenn’s full interview with Treasury Secretary Janet Yellen below.

Tue, June 25, 2024 at 3:22 AM MST

A helpful reminder on Nvidia

While everyone appears to now be an Nvidia (NVDA) expert and is out there waxing poetic on the stock’s recent abrupt slide, I will not go that route this morning.

Instead, I wanted to serve up some factual numbers with the help of BTIG’s technical analyst Jonathan Krinsky. They provide nice context on why Nvidia shares are taking a little pause.

Here’s what Krinsky has to say, as if to remind the masses that stocks don’t go up every single day.

“NVDA recently traded ~100% above its 200 day moving average. Since 1990, the widest spread that any U.S. company has ever traded above its 200 day moving average while it was the largest company was 80% by Cisco (CSCO) in March 2000, which marked its all-time high. In other words, NVDA is in a league of its own. It’s also notable that at last week’s peak, NVDA surpassed Microsoft (MSFT) briefly as the largest U.S. company. On March 24, 2000, CSCO surpassed MSFT briefly to also become the largest market cap company, and that marked the peak of both CSCO and the Nasdaq to the day. While we fully recognize the fundamentals are much different this time around, in the last five years, NVDA is +4,280% compared to CSCO’s +4,460% gain in the five years leading up to its peak. Over the last 18 months, NVDA is +827% which is actually double that of CSCO’s 18-month gain into ’00.”

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