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Stock Market Today: S&P500 in fresh record high as chip stocks ride Broadcom rally

Published 13-06-2024, 05:44 am
© Reuters.

Investing.com-- The S&P 500 clinched another record close Thursday, as surge in Broadcom lifted chip stocks and bets on rate cuts this year were boosted by further   signs of slowing inflation. 

At 16:00 ET (20:00 GMT), The S&P 500 rose 0.2% to a fresh record close of 5,432.40, the NASDAQ Composite gained 0.3%, but Dow Jones Industrial Average fell 65 points, or 0.2%.

Benign PPI data helps rate-cut bets

U.S. producer prices unexpectedly fell in May, as the producer price index dropped 0.2% last month after advancing by an unrevised 0.5% in April.

In the 12 months through May, the PPI increased 2.2% after rising 2.3% in April.

This followed weekly jobless claims data showing the number of Americans filing new claims for unemployment benefits jumped to a 10-month high last week, boosting financial market hopes that the Federal Reserve would start cutting interest rates in September.

The odds of two rate cuts following the data now stand at about 70% even as the Fed signaled on Wednesday for just a single cut this year, down from a prior estimate in March for three cuts. 

Broadcom drives chips higher, Google drags on big tech

Broadcom (NASDAQ:AVGO) surged over 12% after the chipmaker clocked bumper earnings and lifted its annual guidance amid rising AI demand. The firm also announced a 10-for-1 stock split.

The chipmaker said its non-AI networking markets, which have been a "fairly big headwind to numbers have bottomed," UBS said as it lifted its price target on the stock to $1,735, up from $1,610 previously.  

Alphabet (NASDAQ:GOOGL) fell more than 1%, keeping lid on gains in big tech.

Strong US Treasury 30-year auction pushes yields lower

The U.S. government sold $22 billion of 30-year notes on Thursday at a lower-than-expected yield, driven by stronger demand.

The yield on the 30-Year Treasury fell to 4.396%, after trading at session highs of around 4.491%, pushing other yields across the curve lower.

Tesla's Musk wins reapproval for $56B pay package; Dave & Buster’s Entertainment in biggest one-day slump since 2022

Tesla (NASDAQ:TSLA) stock gained nearly 3% after CEO Elon Musk said in a social media post that shareholders are backing his $56 billion pay package and a move by the electric vehicle giant to reincorporate in Texas from Delaware.

“This removes a $20- $25 overhang on the stock in our opinion that has weighed on shares since the head-scratching Delaware ruling set this Twilight Zone soap opera on earlier this year,” Wedbush analysts said.

Elsewhere, Dave & Buster’s Entertainment (NASDAQ:PLAY) stock fell 11% and headed for its biggest one-day slump since 2022, after the company’s first-quarter revenue missed estimates. 

GameStop Corp (NYSE:GME) was up 14% as the video game retailer was forced to postpone its annual shareholder meeting to Friday following a technical issue.

(Per Nurse, Ambar Warrick contributed to this article.)

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