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S&P 500 and Nasdaq hit record highs on Fed easing hopes

June 6, 2024

Key points:

  • S&P 500 and Nasdaq indexes hit record closing highs, driven by technology stocks.
  • Private payrolls data shows slowdown in May, indicating potential for Fed rate cuts.

On Wednesday, the S&P 500 and Nasdaq indexes soared to record closing highs, spurred by technology stocks. Economic data hinting at Federal Reserve easing measures provided additional momentum to the market.

Picture: Bullish bias above 5338.00 for S&P500. Download the VT Markets app.

Technology stocks led the charge, with the S5INFT sector seeing the highest gains. Following closely were equities in communications (S5TELS) and industrials (S5INDU) sectors. However, consumer staples (S5CONS) stocks faced declines, making them the biggest losers of the day.

May labour report sees increased job market tightness

Private payrolls data released on Wednesday revealed a slowdown in May, suggesting easing labour market tightness.

This aligns with Tuesday’s report showing job openings in April falling to their lowest in over three years. These indicators are fueling expectations that the Federal Reserve may cut rates later this year.

U.S. 10-year Treasury yields dipped to a two-month low on Wednesday following weaker-than-expected job growth data, ahead of the anticipated government employment report for May on Friday.

Stock market movement

Nvidia (NVDA) led the rally in chip stocks, surging 4.5%. The company’s market valuation reached $3 trillion for the first time, surpassing Apple to become the world’s second-most valuable company.

Hewlett Packard Enterprise (HPE) saw its shares climb 10.7% after forecasting third-quarter revenue above expectations, driven by strong demand for its AI servers.

CrowdStrike Holdings (CRWD) also experienced significant gains, jumping 11.9% following an upbeat second-quarter revenue forecast.

On the downside, Dollar Tree (DLTR) slipped 4.9% after a disappointing quarterly profit forecast. The company announced it is exploring strategic options, including a potential sale or spinoff of Family Dollar.

Intel (INTC) gained 2.5% after Apollo Global Management agreed to purchase a 49% equity interest for $11 billion in a joint venture related to Intel’s Ireland manufacturing unit.

Advancing issues outnumbered decliners by a ratio of 2.39-to-1 on the NYSE and 1.85-to-1 on the Nasdaq. The S&P 500 recorded 24 new 52-week highs and 9 new lows, while the Nasdaq Composite saw 62 new highs and 116 new lows.

The total volume of shares traded across U.S. exchanges was about 10.8 billion, compared to the 12.6 billion average over the last 20 trading days.

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