What's going on?
On June 21, 2024, the market had a mixed day as the S&P 500 fell 0.32% to 5,455.81 points and the Nasdaq fell 0.56% to 17,623.17 points. In contrast, the Dow Jones Industrial Average rose 0.19% to 39,208.48 points.
What does this mean?
The technology sector took a hit, with semiconductors stock Tech stocks such as Nvidia, Qualcomm, and Broadcom fell 2-5%, causing the Philadelphia SE Semiconductor Index to fall 2.2%. The technology sector was the worst performing of the major sectors in the S&P 500, falling 1.3%. Meanwhile, large-cap stocks such as Alphabet, Amazon, and Apple rose 0.6-1.4%. In particular, Spirit AeroSystems rose 4.8% amid rumors of a Boeing takeover, and Sarepta Therapeutics soared 34.8% after the FDA approved expanded use of its gene therapy. On this day, driven by a recovery in employment, U.S. business activity reached its highest level in 26 months since June, with the Flash Services PMI rising to 55.1 and the Flash Manufacturing PMI rising to 51.7.
Why should you care?
For markets: Navigating the seas of uncertainty.
The mixed performance suggests investors are grappling with mixed economic signals, with investors weighing whether the Fed will keep interest rates higher. interest Rising interest rates and the expiration of quarterly derivative contracts are also adding to the uncertainty. With NVIDIA's valuation below that of Microsoft, concerns are growing about whether the rally in AI stocks is sustainable. Market participants should be cautious of fluctuations in tech stock valuations and possible interest rate fluctuations.
Overall picture: A change in the global economy is on the horizon.
In the broader economic context, it is evident that the US market is booming due to a strong recovery in business activity and employment. However, the Fed's hawkish stance and upcoming interest rate decisions may affect global economic strategies. Furthermore, the high valuations of major S&P 500 companies may dampen the market in the short term, affecting investor sentiment globally.
