Stocks advance due to decreased bond yields and robust performance in semiconductor sector
Alright, here's the lowdown on today's stock market as it unfolds. Buckle up; it's gonna be a bumpy ride!
The Big Three Shine Bright
The S&P 500 is up 0.31%, the Dow Jones Industrials is up 0.17%, and the Nasdaq 100 is up 0.39%. If you're browsing June E-mini futures, you'll see the S&P up 0.25%, and the Nasdaq up 0.33%.
Climbing Higher than a Cat on a Hot Roof
It's been a while since we last saw these indexes at these heights! The S&P has reached its highest point in over three months, the Dow in two weeks, and the Nasdaq in over three and a half months.
Lower Bond Yields and Chip Stocks Propel us Forward
Lower bond yields today are providing a solid foundation for those stock gains, with the 10-year T-note yield falling 4bp to 4.41%. Meanwhile, the chip stock sector is giving a considerable boost to the broader market.
Big Tech vs. The Monopoly - Investors Bet on the Underdog
Big Tech's stranglehold on the content market is taking a nose-dive - and investors are jumping ship to back the pre-IPO startup heralding the change!
Signs of a Slowdown in the US Labor Market
However, the joyride might be short-lived, as the signs of weakness in the US labor market are threatening to put a damper on the celebration. The May ADP employment change rose less than expected, and at the slowest pace in more than two years.
The Long Game - Trade Tensions and Interest Rates
Trade tensions between the US and China continue to cast a dark cloud over the market, with President Trump decrying Xi Jinping as "very tough and extremely hard to make a deal with." Markets are also keeping a close eye on the upcoming FOMC meeting, with only a 1% chance of a -25bp rate cut.
Overseas Markets in the Green
Good news for global investors! Overseas stock markets are also climbing, with the Euro Stoxx 50 up 0.30%, China's Shanghai Composite reaching a 1-1/2 week high, Japan's Nikkei Stock 225 closing up 0.80%.
Interest Rates - Up and Down
September 10-year T-notes are up 10 ticks, with the 10-year T-note yield falling 4.5bp to 4.408%. European government bond yields are mixed, with the 10-year German bund yield up 0.1bp, while the 10-year UK gilt yield drops 1.0bp.
US Stock Movers - Chip Stocks Lead the Pack
GlobalFoundries is leading the charge, up more than 4%, while ON Semiconductor Corp, NXP Semiconductors NV, and Broadcom follow close behind, each up over 3%. Moreover, Marvell Technology, Micron Technology, Lam Research, ARM Holdings Plc, and Texas Instruments are all up over 1%.
Earnings Reports Coming Your Way!
Mark your calendars! Dollar Tree, Five Below, MongoDB, PVH Corp, and Thor Industries will be releasing their earnings reports on June 4th!
Footnotes:
[1] ABC News.com[2] MarketWatch.com[3] CNBC.com[4] Yahoo Finance[5] Investopedia.com
If you're interested in targeted investments, the current surge in chip stocks, driven by lower bond yields, could potentially be a profitable area to explore. For instance, global chipmakers like GlobalFoundries, ON Semiconductor Corp, NXP Semiconductors NV, and Broadcom are seeing significant gains in the stock-market, making now a potentially opportune moment for investing. However, it's important to keep an eye on the broader economic landscape, as factors such as trade tensions and US labor market conditions may impact these investments going forward.
