Stock market today: S&P, Nasdaq fall as Nvidia slides for 2nd straight day

US stocks mostly finished in the red Friday as a tech-led rally showed real signs of fatigue for the first time in over a week.

The benchmark S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) both lost about 0.2%. The Dow Jones Industrial Average (^DJI) managed to climb just over the flatline.

All three indexes logged a weekly win, but the Nasdaq barely gained ground.

The quiet session comes after a notable dip on Thursday. The S&P had been flying higher, briefly crossing 5,500 for the first time. But the Nasdaq snapped a streak of seven straight record closes with its loss in the prior session.

Nvidia (NVDA), which briefly catapulted to the title of world's most valuable company this week, has led the AI-fueled rally. But after a sizable loss on Thursday, it lost more than 3% Friday. Other chip stocks, including Broadcom (AVGO), Super Micro Computer (SMCI), and Qualcomm (QCOM), slumped alongside Nvidia.

Investors are also assessing the broader health of the US economy and the path for interest rates. Former St. Louis Fed president James Bullard, an inflation hawk, said Thursday that last week's cool Consumer Price Index reading could pave the way for a rate cut in September. Around two-thirds of traders still expect rate cuts to begin then, according to the CME FedWatch tool. Next week investors will get a fresh reading from the Fed's preferred inflation gauge, which will provide another data point for central bankers to mull over.

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Nvidia sheds 3% as stocks finish mostly lower

Fri, June 21, 2024 at 4:05 p.m. EDT, Hamza Shaban

The AI darling Nvidia lost ground for the second straight session as the major indexes mostly finished lower. A tech-led rally that has powered gains so far this month showed signs of weakness as investors took profits and paused the steady climb, at least for a moment.

The benchmark S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) both gave up about 0.2%. The Dow Jones Industrial Average (^DJI) eked out a win, rising just above the flatline.

A look at the week ahead

Fri, June 21, 2024 at 3:30 p.m. EDT, Hamza Shaban

The start of summer also brings a relative lull next week as investors come off record finishes for major indexes and the first signs of a slowdown in the staggering tech-led rally.

Earnings season has gone quiet too, although Nike (NKE), Walgreens (WBA), FedEx (FDX), and General Mills (GIS) are among the major tickers set to report next week.

A significant economic indicator is on the horizon, however. The Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures price index, or PCE, will be released on Friday.

The PCE reading follows another inflation metric, the Consumer Price Index (CPI), which earlier this month showed consumer price increases cooled during the month of May. If Friday's PCE reading also indicates a cooling of price pressures, it will give the Federal Reserve another reason to cut interest rates in the months ahead.

Market bets currently expect central bankers to lower rates starting in September. A favorable PCE reading would likely confirm that forecast, while a reading that showed stubborn inflation would probably push back expectations of the first rate cut.

The US presidential campaign is also coming into view. Investors will get their first taste of the presidential debates on Thursday night, when Joe Biden and Donald Trump face off on CNN. How the candidates view tax policy, global trade, the role of the Federal Reserve, and other economic issues will be top of mind for many viewers.

Yahoo Finance's Brent Sanchez has a graphical breakdown of what to watch next week:

Investors are buying into AI and Musk any way they can

Fri, June 21, 2024 at 2:45 p.m. EDT, Hamza Shaban

Elon Musk revealed earlier this week that Super Micro (SMCI) will provide hardware for the supercomputer his AI startup is building. That triggered a pop in the stock.

When Dell's (DELL) CEO said his company would be building an "AI factory" for Musk's xAI in partnership with AI kingpin Nvidia (NVDA), its shares also rose.

And though the jumps in both names were short-lived, their performance this year and the response to Musk's one-word post are reminders that what he says matters to a lot of people and that anything related to AI will push markets around.

It doesn't take a contrived plan or a sideways approach to profit from Wall Street's excitement around AI technology. The main driver of 2024's seemingly unstoppable run is the earnings potential of the Magnificent Seven, which includes Nvidia, Tesla, and the platform giants.

Citi analysts, who earlier this week upped their S&P 500 year-end target to 5,600, observed that more than two-thirds of the stock market’s gains so far have flowed from the Magnificent Seven.

And adding Elon to the mix certainly doesn't hurt.

Investors attempting to create a makeshift Musk basket of related tech holdings are doing the same thing with Nvidia. Because it's not just the Big Tech platforms churning out apps and productivity software that are drafting off AI exuberance. There's an entire ecosystem out there.

Tesla tells judge that shareholder vote should reverse Musk pay ruling

Fri, June 21, 2024 at 1:55 p.m. EDT, Hamza Shaban

Now that shareholders have backed Tesla's pay package for CEO Elon Musk, the company believes the judge presiding over the case should reverse her earlier ruling that invalidated the compensation deal, Reuters reported Friday.

In a filing that was made public on Friday, Tesla said it should now prevail in the case and that the company will file a motion to reverse the ruling.

The expected legal move comes after shareholders voted in favor of the pay pact, granting Musk and Tesla a major victory and ammunition to challenge the decision.

Tesla argued that the company has corrected the deficiencies the judge found in the run-up to the pay deal. By reviewing the package by an independent board member and seeking reapproval from shareholders who were given additional information, the company believes it addressed the finding that the original pay package should not have been approved.

But even with the support of shareholders, it isn't clear what the impact of the vote will have on the decision.

The legal team representing the shareholder who sued over the pay package has argued that the vote has no legal impact.

Stocks trending in afternoon trading

Fri, June 21, 2024 at 1:15 p.m. EDT, Hamza Shaban

Here are some of the stocks leading Yahoo Finance’s trending tickers page during afternoon trading on Friday.

Nvidia (NVDA): Shares of the AI darling are down more than 2% Friday afternoon as investors take profits and offer a break from the staggering pace of gains for the company that briefly had the highest market cap on Wall Street. Bank of America analysts reiterated a Buy rating this week with a $150 price target, calling Nvidia a "top pick."

Asana (ASAN): The maker of work management software gained 12% after the company approved a stock buyback program of up to $150 million for its Class A common stock. But Asana has had a tough going so far this year, with the stock down more than 30% year to date.

Gilead (GILD): The pharmaceutical company rose 2% Friday after seeing encouraging results from its twice-yearly shot to prevent HIV.

Nike (NKE): The sports apparel retailer gained more than 1% after analysts at Oppenheimer upgraded the stock from Perform to Outperform and raised its price target from $110 to $120, implying an increase of 26%. Nike will report earnings on Thursday next week.

Stocks waver in afternoon trading

Fri, June 21, 2024 at 12:34 p.m. EDT, Hamza Shaban

US stocks clung closely to the flatline to start the afternoon session on Friday as this month's rally, led by the biggest tech names, paused as the week draws to a close.

The benchmark S&P 500 (^GSPC) was unchanged, while the tech-heavy Nasdaq Composite (^IXIC) gained 0.2%. The Dow Jones Industrial Average (^DJI) slipped just below the flatline.

'No landing' chances increase, Bank of America economists say

Fri, June 21, 2024 at 11:58 a.m. EDT, Hamza Shaban

In a new mid-year outlook, economists at Bank of America forecast what they describe as a "gilded glidepath" for the US economy, defined by continuing outperformance and the absence of a hard landing through the end of 2026.

"Our forecast could easily be described as a gilded glidepath: it's close to perfection in every dimension," the analysts wrote on Friday.

"We assume the main factors that drove relative outperformance of the US economy in recent years continues, including strong growth in the labor force, the catch-up effect in employment, supportive fiscal policies, and the crowding in of domestic manufacturing investment," they said.

The analysts expect the Fed to begin the first interest rate cut in December. Central bankers, they predict, will, cut rates quarterly to land at a range of 3.5%-3.75% by 2026. But even as the Fed has avoided a hard landing so far, the economists do see risks ahead. The Fed could keep rates higher for longer if inflations remains sticky, they wrote.

Other risks to their optimistic forecast include a faster-than-expected end to catch-up employment, rising inflation, which would force the Fed to tighten again, as well as geopolitical risks and the upcoming presidential election.

Nvidia's market cap slips below Microsoft and Apple

Fri, June 21, 2024 at 11:11 a.m. EDT, Hamza Shaban

The AI darling Nvidia (NVDA) is having a down day. But the intensity of the fall highlights just how high the stock has climbed, and how closely Wall Street's most valuable companies are competing against one another for the coveted top spot.

Shares of the chipmaker fell more than 2% Friday morning. But the tech-heavy Nasdaq Composite (^IXIC) climbed just over the flat line during the last hour of morning trading, trimming back earlier losses.

After closing at a record $135 per share earlier this week, Nvidia's investors took profits and gave up some ground, offering the AI-fueled rally a breather. After briefly holding the title as the market's most valuable company, Nvidia slipped behind its rivals, dropping to a market cap of $3.14 trillion.

Meanwhile the other players vying for the No. 1 position rose slightly. Shares of Microsoft (MSFT) gained 0.5% Friday, giving the company a market cap of $3.32 trillion. Apple (AAPL) shares increased by roughly the same amount, with the iPhone maker's market cap standing at 3.24 trillion.

Stocks trending in morning trading

Fri, June 21, 2024 at 10:21 a.m. EDT, Hamza Shaban

Here are some of the stocks leading Yahoo Finance’s trending tickers page during morning trading on Friday.

Gilead (GILD): The pharmaceutical company rose almost 4% Friday morning after seeing encouraging results from its twice-yearly shot to prevent HIV.

Nikola (NKLA): Shares of the commercial EV maker gained more than 6% Friday following a brutal session Thursday when the stuck sank after after the company announced a 1-for-30 reverse stock split announcement. The reverse split will go into effect at the market's close on Monday, June 24.

CarMax (KMX): The used car dealer increased 2% during morning trading after reporting fiscal first quarter earnings that beat analysts’ estimates on earnings, even as the company reported lower margins from vehicle sales impacting the industry.

Nike (NKE): The sports apparel retailer gained close to 1% Friday after analysts at Oppenheimer upgraded the stock from Perform to Outperform and raised its price target from $110 to $120, implying an increase of 26%.

Home prices hit record high in May

Fri, June 21, 2024 at 10:14 a.m. EDT

The cost of buying a home reached a new record high in May, making homeownership even more of a challenge for would-be buyers.

The median sales price for previously owned homes jumped to $419,300 — a 5.8% bump from May last year — and marked the 11th consecutive month of year-over-year price gains, according to the National Association of Realtors. It's the highest price ever recorded.

The jump in prices was more pronounced in some regions. In the Northeast, the median price rose to $479,200, a 9.2% gain from a year ago, while in the Midwest, the median price climbed to $317,100, a 6.4% surge from the prior year.

Sales of previously owned homes dropped 0.7% in May from the prior month to a seasonally adjusted annual rate of 4.11 million and 2.8% lower from a year ago.

“Eventually, more inventory will help boost home sales and tame home price gains in the upcoming months,” NAR chief economist Lawrence Yun said in a statement. “Increased housing supply spells good news for consumers who want to see more properties before making purchasing decisions.”

The drop in sales comes as mortgage rates remain elevated. The average weekly rate on the 30-year fixed mortgage slid to 6.87% from 6.95% a week prior, per Freddie Mac data.

Stocks slip as AI rally cools

Fri, June 21, 2024 at 9:32 a.m. EDT, Hamza Shaban

US stocks mostly lost ground Friday at the opening bell as investors riding the tech-led rally took a breather.

The benchmark S&P 500 (^GSPC) lost around 0.1%, while the tech-heavy Nasdaq Composite (^IXIC) fell by 0.2%. The Dow Jones Industrial Average (^DJI) rose close to 0.2%.