Reply To: Traders Market Weekly: Cracks Widen in China and Emerging Markets


Dow -330.06 at 38111.48, Nasdaq -183.50 at 16737.09, S&P -31.47 at 5235.48

The major indices closed with solid losses despite an underlying positive bias today. The market-cap weighted S&P 500 fell 0.6% and the equal-weighted S&P 500 closed 0.5% higher. Selling in some of the weightiest stocks picked up in the last half hour of trading, driving the afternoon deterioration that left the major indices near their lows of the day.

NVIDIA (NVDA 1105.00, -43.25, -3.8%), which extended its early loss following a Bloomberg report that the US is slowing the issuing of Middle East licenses for AI chip makers, Microsoft (MSFT 414.67, -14.50, -3.4%), Alphabet (GOOG 173.56, -3.84, -2.2%), and Meta Platforms (META 467.05, -7.31, -1.5%) were losing standouts from the mega cap space.

Dow component Salesforce (CRM 218.01, -53.61, -19.7%) was another influential laggard, sliding 20% on disappointing guidance.

Losses in the aforementioned names led their respective S&P 500 sectors to close with solid declines. The information technology sector fell 2.5% and the communication services sector logged a 1.1% loss.

The remaining nine sectors closed with gains ranging from 0.1% to 1.5%.

The only sectors to close more than 1.0% higher were the rate-sensitive real estate (+1.5%) and utilities (+1.4%) sectors, benefitting from a drop in market rates.

The movement in market rates contributed to the underlying upside bias in equities, along with some hopeful anticipation in front of the PCE Price Indexes tomorrow, which is the Fed’s preferred gauge on inflation. The 2-yr note yield fell five basis points to 4.93% and the 10-yr note yield declined seven basis points to 4.55%.

The price action in Treasuries follows a slate of economic data this morning, including a downward revision to Q1 GDP, a widening in the goods deficit in April, an ugly 7.7% decline in pending home sales in April, and some otherwise decent initial jobless claims figures.

Market participants were also digesting some mixed earnings news from retailers.

Best Buy (BBY 81.55, +9.65, +13.4%) and Foot Locker (FL 25.89, +3.37, +15.0%) were among the winners in that respect. Meanwhile, shares of Kohl’s (KSS 21.02, -6.23, -22.9%) and Dollar General (DG 127.94, -11.34, -8.1%) slid after reporting quarterly results.

CME Group index pricing for the Dow Jones Industrial Average and S&P 500 briefly froze around 10:41 ET, but began updating as usual around 12:00 ET.

Nasdaq Composite: +11.5% YTD
S&P 500:+9.8% YTD
S&P Midcap 400: +6.0% YTD
Russell 2000: +1.5% YTD
Dow Jones Industrial Average: +1.1% YTD