Market Review 11th June 2024
Simplify the craziness
DAILY REVIEW
N
3 min read
The S&P 500 and Nasdaq surged to fresh record highs on Tuesday, buoyed by a significant rise in Apple Inc. shares. However, broader market sentiment remained cautious as investors awaited critical economic data and policy decisions due later this week.
Market Highlights
S&P 500: Gained 14.53 points, or 0.3%, closing at 5,375.32.
Nasdaq Composite: Rose 151.02 points, or 0.9%, to 17,343.55.
Dow Jones Industrial Average: Declined by 120.62 points, or 0.3%, ending at 38,747.42.
Apple’s impressive performance led the tech sector’s gains, with the company’s shares surging 7.3% to a new record, marking the largest daily percentage increase since November 2022.
Fed Policy Meeting and CPI Report
The Federal Reserve began its two-day policy meeting on Tuesday, with market participants widely expecting the central bank to hold interest rates at a two-decade high. Investors are keenly focused on the Fed's economic projections, especially the anticipated "dot plot," which will outline future interest rate expectations. The last projection indicated three rate cuts this year, but current market sentiment suggests a revision to two.
Rick Rieder, BlackRock’s chief investment officer of global fixed income, emphasized the uncertainty among Fed officials. "It's a very close call," Rieder noted, suggesting that projections could indicate just one rate cut this year.
The May consumer-price index (CPI) report, set for release on Wednesday, is expected to offer further insight into inflation trends. Economists polled by the Wall Street Journal forecast a 0.1% rise in headline CPI, marking the smallest increase in seven months. The core CPI, excluding volatile food and energy prices, is anticipated to climb 0.3% for the second consecutive month.
Investor Sentiment and Market Reactions
Markets are poised for significant movements depending on Wednesday's data and Fed announcements. A cooler-than-expected CPI could bolster the chances of a September rate cut, while hotter data might dampen such expectations. The CME FedWatch Tool shows a divided market on whether one or two rate cuts are still plausible this year.
Technology stocks were the primary drivers of Tuesday’s gains, with the S&P 500 technology index climbing 1.7% to a record closing high. Apple’s AI announcements at its annual developer event on Monday spurred investor optimism, propelling its stock to a record close. Apple unveiled new AI features, including an enhanced Siri virtual assistant capable of handling more complex tasks.
Broader Market Movements
Bitcoin: Slumped 3.4% to $66,922.
General Motors (GM): Approved a $6 billion share buyback plan.
Southwest Airlines: Rose 9% after Elliott Management amassed a $1.9 billion stake.
GameStop: Fell nearly 15% in volatile trading.
Apple: Gained 2% during regular trading and 7% in aftermarket sessions.
Key Economic Data to Watch
CPI Report: Expected to show a modest increase, providing clues on inflation trends.
Fed Policy Announcement: Markets are eager to hear the Fed’s plans for interest rates and economic projections.
Oliver Pursche, senior vice president and advisor for Wealthspire Advisors, noted the prevailing unease among investors. "Everybody is feeling uneasy, but the data and actions consumers are taking continue to point toward resiliency, and that tends to be overall fairly bullish," Pursche said.
Conclusion
As markets navigate through a week packed with crucial economic events, investor focus remains on the Fed’s policy decisions and inflation data. The outcomes will likely set the tone for the remainder of the year, influencing market trajectories and investment strategies.
For the latest updates on market trends and economic data, stay tuned to our comprehensive coverage.
References
CME FedWatch Tool
