Markets News, June 12, 2024: Nasdaq, S&P Hit Records After CPI; Fed Sees 1 Rate Cut in 2024 (2024)

Stock Indexes Wrap: AI Optimism Propels Tech Higher as Rate Cut Hopes Boost Housing Stocks

June 12, 2024 04:19 PM EDT

The Dow

Apple (AAPL) led the index for a second consecutive day, climbing 2.9% to close at another record high as Wall Street forecast an AI-driven upgrade cycle could reinvigorate iPhone sales later this year.

Home Depot (HD) rose 2.5% amid optimism mortgage rates may fall after a softer-than-expected inflation report raised hopes for a Fed interest rate cut later this year.

Microsoft (MSFT) followed Apple higher, rising 1.9% to close at a record high and narrowly hold onto its title as the world’s most valuable company. Apple finished the day just $12 billion shy of Microsoft’s $3.278 trillion valuation.

Caterpillar (CAT) edged 0.4% higher after its board approved an additional $20 billion in share buybacks and raised its dividend.

Nike (NKE) fell 2.3% after a European court dismissed its bid to trademark the term “Footware,” a portmanteau combining “foot” and “software” or “hardware.”

S&P 500

Oracle (ORCL) surged 13.3% to close at a record after announcing cloud infrastructure deals with Microsoft, OpenAI, and Alphabet, overshadowing its quarterly earnings miss.

Builders FirstSource (BLDR) rose 5.3% on hopes for lower interest rates and a thawing of the deeply frozen housing market. Homebuilder Pultegroup (PHM) and home improvement retailer Lowe’s (LOW) rose 4.5% and 3.1%, respectively.

Regional and mid-sized banks advanced as a tame inflation report spurred a Treasury rally, boosting the value of the bond portfolios that were a major factor in last year’s regional banking crisis. Comerica (CMA) rose 4.7%, while Citizens Financial (CFG) advanced 3.5% and Synchrony Financial (SYF) climbed 2.9%.

The energy sector lagged the broader market, led by Valero Energy (VLO), down 3.4%, and Marathon Petroleum (MPC), down 3.3%.

Food and beverage stocks also slipped as Wall Street embraced risk. Monster Beverage (MNST) shed 2.2% and Mondelez International (MDLZ) lost 2.2%.

Nasdaq 100

Software companies led the index as markets looked forward to lower interest rates. Autodesk (ADSK) gained 5.5% and Intuit (INTU) rose 4.5%.

Tesla (TSLA) rose 3.9% ahead of its annual shareholder meeting tomorrow, at which shareholders will vote on whether to reinstate Elon Musk’s $56 billion pay package.

Chip stocks climbed, with Micron (MU) advancing 4.2% and Nvidia (NVDA) adding 3.6%.

Broadcom (AVGO) rose 2.4% ahead of its earnings report after the closing bell.

Caterpillar Boosts Share Buyback Plan, Raises Dividend

June 12, 2024 03:16 PM EDT

Caterpillar (CAT) said Wednesday that it expanded its stock buyback plan and raised its dividend.

The manufacturer of construction and mining equipment announced that its board added $20 billion to its current share repurchase program launched in 2022, giving it a total of $21.8 billion. The program has no expiration date.

The company also boosted its quarterly dividend by 11 cents to $1.41, payable Aug. 20 to shareholders of record at the close of business on July 22.

Caterpillar shares were up about 0.5% at $329.03 as of 3 p.m. ET Wednesday. They've added about 11% since the start of the year.

-Bill McColl

Homebuilders, Housing Stocks Soar on Soft CPI

June 12, 2024 02:23 PM EDT

Shares of companies heavily exposed to U.S. residential real estate jumped on Wednesday after a soft inflation report raised hopes for a Fed interest rate cut that could help to rekindle a stagnant housing market.

Wednesday’s inflation report, which revealed consumer prices were practically unchanged in May, raised hopes that the Federal Reserve will begin cutting its benchmark federal funds rate later this year. That would reduce the rates on all kinds of consumer loans, including mortgages, which have declined somewhat this year but remain north of 7% on average.

The report gave a boost to home builders, home improvement retailers, mortgage lenders, and home listing services. The iShares U.S. Home Construction ETF (ITB) was up 3.7% Wednesday afternoon, boosted by its largest holdings, homebuilders D.R. Horton (DHI) and Lennar (LEN), up 3.3% and 2.3%, respectively.

Shares of Zillow Group (Z) surged more than 12%, while lender Rocket Cos. (RKT) gained more than 4%. Home improvement giant Home Depot (HD) was the second-best-performing stock in the Dow, up 3%.

Bitcoin Flirts With $70K Again Amid Inflation Respite Before Fed Meeting

June 12, 2024 01:19 PM EDT

Bitcoin's price (BTC) rose to nearly $70,000 Wednesday as investors cheered better-than-expected inflation data for May that raised hopes of a rate cut by the U.S. Federal Reserve.

U.S. Consumer Price Index (CPI) data released Wednesday morning showed that prices in May remained unchanged month-over-month and rose 3.3% from the same month last year.

Bitcoin prices took a cue from Wednesday's inflation report, reversing their downtrend from Friday to come within striking distance of the $70,000 level. At 12:30 p.m. ET, bitcoin was trading at $69,359.30.

With inflation trending lower, the data-dependent Federal Reserve has more reason to consider lowering interest rates.

Why does that matter to bitcoin investors?

Bond yields have surged amid higher rates, so that means bonds—a relatively less risky asset—also offer a good return, making them more attractive to investors. Lower interest rates following a Fed rate cut will likely drag down bond yields, potentially tempting investors to bet on risk assets like crypto in search of higher returns.

-Kyle Torpey

Paramount Stock Lags After Shari Redstone Kills Skydance Deal

June 12, 2024 12:00 PM EDT

Paramount Global (PARA) missed out on the CPI-fueled stock rally, a day after tumbling following reports controlling shareholder Shari Redstone had called off monthslong merger talks with Skydance Media.

The decision, first reported by The Wall Street Journal, came shortly before a committee of Paramount directors was scheduled to vote on the proposed merger.

The two parties had agreed on the financial terms of the deal but failed to see eye-to-eye on whether to seek the approval of non-controlling shareholders, according to the Journal. Redstone, who is not Paramount’s majority shareholder but owns a controlling interest through her family's holding company National Amusem*nts, advocated for putting the merger to a vote to avoid potential lawsuits. Skydance allegedly resisted.

According to theJournal, Redstone is now likely to explore selling just National Amusem*nts rather than merging Paramount with another entity.

Paramount shares were little changed and has lost 25% of its value so far this year.

-Colin Laidley

GameStop's Speedy Stock Sale May Have Been Helped by 'Roaring Kitty'

June 12, 2024 11:17 AM EDT

GameStop (GME) appears to have gotten a boost from “Roaring Kitty.”

The struggling video game retailer andmeme stockdarling said it has completed the stock sale it announced just last Friday, when it alsounexpectedly released first-quarter earnings.

GameStop said that it had sold the maximum number of shares in the prospectus, 75 million, and raised approximately $2.14 billion. The company noted that it intends to use the money raised for general corporate purposes, “which may include acquisitions and investments.”

The speed by which the sale was completed may have been driven by meme-stock hero "Roaring Kitty," a.k.a. Keith Gill, who earlier this monthindicatedin a Reddit post that he held a large position in GameStop, and then followed that up with a longYouTube livestreamchatting about it.

GameStop shares rose 6% in a volatile trading session and are almost double this year.

-Bill McColl

Watch Out for These Levels in Oracle's Stock Price

June 12, 2024 10:40 AM EDT

Oracle (ORCL) shares surged Wednesday to record highs after theenterprise software giant announcedcloud infrastructure deals with Microsoft (MSFT), Alphabet’s Google (GOOGL) and Chat GPT owner Open AI that outweighedquarterly results that fell shortof Wall Street expectations.

Oracle shares have oscillated within a broadascending trianglesince mid-December, with the price testing the pattern’s lower trendline on several occasions over the past six months but remaining above both the 50- and 200-daymoving averages.

Typically, an ascending triangle suggests acontinuationof the prevailing trend prior to its formation, which in the case of Oracle shares, is a resumption of the stock’s uptrend.

Following Wednesday’s breakout from the ascending triangle to a newrecord high, investors can use technical analysis to predict a possible longer-term price target using themeasuring principle.

To do this, calculate the pattern’s widest distance inpointsand add that figure to the triangle’s toptrendline. For instance, we add $29 to $129, which projects a price target of $158. Investors may use this level to lock in profits or monitor as a potential region on the chart where the shares may face selling pressure.

Duringpullbacks, investors should keep an eye on the $129 level, an area where the price is likely to findsupportfrom the ascending triangle’s top trendline. Abreakdownbelow this region could see a retest of the pattern’s lower trendline, currently sitting around $118.50.

Oracle shares rose 12% bringing their year-to-date gain to 32%.

-Tim Smith

Watch Out for These Levels in Apple's Stock Price

June 12, 2024 10:05 AM EDT

Apple (AAPL) shares sit atopwatchlistsafter the stock jumped more than 7% on Tuesday to mint a newrecord closing high, its first since Dec. 14. The surge followed the unveiling Monday of “Apple Intelligence,” a personalized version of artificial intelligence (AI) specifically designed for its devices, as well as a partnership with ChatGPT-makerOpenAI.

The daily percentage gain, the iPhone maker’s largest since November 2022, added around $215 billion to the company’smarket capitalization.

Apple shares have traded within an establishedtrading rangesince August last year, with the price tagging the pattern’s upper and lower trendlines several times over the past nine months. Since finding buying interest near the bottom of the range in late April, the stock has continued to trend higher, culminating in Tuesday’s 7.3% breakout to a new closing high of $207.15.

Importantly, the breakout occurred on the highesttrading volumein more than a year, suggesting buyer conviction by larger market participants, while the50-day moving average (MA)also sits poised to cross above the 200-day MA to form agolden cross buy signal, a chart pattern technical analysts interpret as marking the start of a new uptrend.

Looking ahead, investors can forecast a price target using a measured move by calculating the distance of the trading range in dollars and adding the amount to the pattern’s top trendline. For example, adding $31 to $197 projects aprice targetof $228. This level could become a potential area ofresistancewhere sellers may be satisfied to book profits.

When looking forretracementopportunities, investors should eye the trading range’s top trendline at $197 as this area has most likely flipped from an area of resistance intosupport. It’s also worth keeping in mind that a failure to hold this key level could indicate a potentialbull trap, a chart pattern that cautions a downside reversal.

Apple shares were up 2%, bringing its year-to-date gain to over 10%.

-Tim Smith

Stock Futures Gain Ahead of Fed Outlook

June 12, 2024 08:23 AM EDT

Dow futures were up 0.1% in premarket trading Wednesday.

S&P futures were up 0.1%.

Nasdaq futures were up 0.2%.