Profit taking at Nvidia
Wall Street takes a breather
06.06.2024, 23:14
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After the previous day’s rally, trading on Wall Street is calmer again. Investors are eagerly awaiting the US labor market report, which will be published tomorrow. Nvidia shares are climbing even higher before traders cash in.
Supported by sustained price gains by heavyweight Nvidia, US stock markets briefly climbed to record highs again on Thursday. However, profit-taking at the chip company and surprisingly weak US job data slowed the rise. The technology index Nasdaq and the broad S&P500 initially rose by almost half a percent each and reached new highs of 17,235.73 and 5,362.35 points respectively. However, the Nasdaq quickly gave up these gains and was last quoted around 0.1 percent lower at 17,173 points. The S&P was hardly changed recently at 5,352 points. The US standard value index Dow Jones remained up 0.2 percent at 38,886 points.
Nvidia titles gained two percent in early trading and reached a record high of $1,248.80 for the third day in a row before falling 1.1 percent to $1,210. This meant that the market value of the world market leader for special processors for artificial intelligence (AI) fell back below the three trillion dollar mark, which it had exceeded for the first time the day before. There will be a stock split on Friday to make the shares more tradable.
The three largest US stocks, Microsoft, Apple and Nvidia, now account for 20 percent of the market capitalization of all companies listed in the S&P 500, calculated Neil Wilson, chief analyst at brokerage firm Finalto. Almost half of the price gains in this index since the beginning of the year can be attributed to Nvidia alone. “That’s a bit scary.” Larger price drops for these companies could drag the entire market down.
After the job data is before the job data
Initial claims for US unemployment benefits rose more than expected last week, adding to a series of mixed economic data in recent days. Investors therefore turned their attention to the employment figures due out on Friday as an indication of the timing of a possible interest rate cut by the US Federal Reserve. Experts expect 185,000 jobs outside of US agriculture to be created in May. A figure of between 100,000 and 150,000 would be ideal, said investment strategist Ben Bennett from the asset management department of the insurer Legal & General. This would keep hopes of an imminent US interest rate cut going. A significantly higher increase, on the other hand, would put a damper on them. Lower figures or job cuts would fuel fears of a “hard landing” for the world’s largest economy.
In demand were Robinhood Markets with a premium of 6.5 percent. With the largest takeover in the company’s history, Robinhood wants to strengthen its market position in trading with Bitcoin & Co. The online broker announced that it would take over the cryptocurrency exchange Bitstamp, which is popular in Europe and Asia, for 200 million dollars in cash. The booming business with cyber currencies recently brought Robinhood record quarterly sales.
Things also improved for Lululemon AthleticaThe sportswear manufacturer posted higher profits than expected in the first quarter thanks to strong business in China and announced that it would expand its share buybacks. The share price rose by 4.8 percent.