S&P 500 and Nasdaq Reach Record Highs Amid Tech Surge

June 6, 2024
Paul Svensen

The S&P 500 and Nasdaq Composite closed at record highs on Wednesday, driven by a surge in the tech sector. Nvidia and Apple both crossed the $3 trillion market cap milestone, contributing significantly to the market’s gains. Investors are optimistic about potential interest rate cuts amid signs of a cooling economy.

Key Takeaways

S&P 500 and Nasdaq Composite hit record highs.
Nvidia and Apple both surpassed $3 trillion in market value.
Optimism for interest rate cuts grows as labor market shows signs of cooling.

Market Performance

The S&P 500 rose by 1.2% to close at a record 5,354, while the Nasdaq Composite led the gains with a 2% increase, closing at 17,187. The Dow Jones Industrial Average also saw a modest gain of 0.3%, ending the day at 38,807.33. The tech sector was the clear leader, with Nvidia and Apple both reaching significant market cap milestones.

Tech Sector Highlights

Nvidia: The chipmaker’s stock surged over 5%, crossing the $3 trillion market cap for the first time. This makes Nvidia the third U.S. company to achieve this milestone, following Apple and Microsoft.
Apple: The tech giant also returned to a $3 trillion market cap, a level it hadn’t seen since January.
Hewlett Packard Enterprise: Shares soared nearly 12% following strong earnings, marking the company’s best day since 2020.
CrowdStrike: The cybersecurity firm saw its stock jump more than 11% after reporting excellent fiscal Q1 results.

Economic Indicators

Investors had a batch of new economic data to digest, including a slowdown in private-sector hiring and a surge in the Institute for Supply Management’s services-activity index. The ADP private payrolls report showed that job growth in May was below estimates, adding to the evidence of a cooling labor market. This has fueled hopes for potential interest rate cuts by the Federal Reserve.

Bond Yields and Oil Prices

The yield on the 10-year Treasury bond fell to 4.28%, its lowest level since March. This decline in bond yields has further boosted investor sentiment. Oil prices also rebounded from four-month lows, with Brent crude rising 0.8% to $79.03 a barrel and WTI trading 0.9% higher at $74.73 a barrel.

Broader Market Impact

The rally in tech stocks has had a significant impact on the broader market. The S&P 500 has now marked 25 record closes this year, bringing its gains since January to more than 12%. The Nasdaq is up more than 14% year-to-date. The optimism extends beyond the U.S., with the Bank of Canada becoming the first Group of Seven country to lower interest rates since the Covid-19 pandemic, and the European Central Bank expected to follow suit.

Conclusion

The record highs in the S&P 500 and Nasdaq Composite reflect strong investor confidence, particularly in the tech sector. With Nvidia and Apple leading the charge, and growing optimism for interest rate cuts, the market appears poised for continued growth despite some signs of economic cooling.