Stock market today: S&P 500, Nasdaq notch fresh records as huge week on Wall Street kicks off

All three major indexes closed higher on Monday — with the S&P 500 and Nasdaq both notching fresh records — as investors braced for a Federal Reserve policy decision and key inflation data in the week ahead.

The Dow Jones Industrial Average (^DJI) finished the day up about 0.2%, coming off a muted end to a winning week for the three major gauges. The benchmark S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) each rose about 0.3% and 0.4%, respectively, to reach their latest highs.

Strength in a mixed May nonfarm payrolls report reinforced bets that the Fed will keep interest rates at a two-decade high for longer. Trader expectations for a cut in September have fallen, while those for November have risen, according to the CME FedWatch tool.

Read more: How does the labor market affect inflation?

Investors are now looking ahead to the Fed's next rate decision and May's Consumer Price Index inflation reading, both due on Wednesday, which will provide another big test for stocks.

Investors have also kept a watchful eye on potential fallout from political upsets in Europe. France's President Macron called a snap national election after a trouncing from the far right in Sunday's EU-wide vote, while Germany's leader also suffered a crushing defeat. The euro (EUR-USD=X) slumped to its lowest level in a month, while the Paris stock index (^FCHI) sank around 2%.

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S&P 500, Nasdaq nab records

Mon, June 10, 2024 at 4:05 p.m. EDT, Alexandra Canal

Stocks reversed earlier losses to end Monday's bumpy trading session in the green — with yet another record close for both the Nasdaq and S&P 500.

The Dow Jones Industrial Average (^DJI) finished the day up about 0.2% while the benchmark S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) each rose about 0.3% and 0.4%, respectively, to reach their latest highs.

Yields edged higher with the 10-year treasury (^TNX) rising about 4 basis points to trade near 4.47%.

Oil also moved to the upside. West Texas Intermediate (CL=F) rose more than 3% to trade just under $78 per barrel. Brent (BZ=F), the international benchmark price, also climbed around 3% to hover around $82 a barrel.

Apple Intelligence is here

Mon, June 10, 2024 at 3:00 p.m. EDT, Alexandra Canal

Apple’s (AAPL) Worldwide Developers Conference event kicked off Monday in Cupertino, Calif. as the tech giant announced its long-awaited generative AI initiative: Apple Intelligence.

Yahoo Finance's Dan Howley has the details:

The technology, Apple's first step into generative AI, will be deeply integrated across the company's hardware and software products ranging from the iPhone and Mac to Mail, Messages, and Photos.

Apple is positioning Apple Intelligence as a unique offering that can understand you and your data, rather than a broad-based AI system like ChatGPT or Google's AI Overview. Apple Intelligence will be available for the iPhone 15 Pro and iPads and Macs running Apple's M1 series chips and newer later this fall.

The biggest changes are coming to Apple's Siri. The original smartphone voice assistant, Siri has been in desperate need of a fresh coat of paint for years, and Apple Intelligence will offer just that. The company says the assistant will feature a new look, feel more natural, and be more responsive.

Like other generative AI-powered assistants, you'll be able to ask follow-up questions and interrupt yourself while making requests. You'll also now be able to speak to Siri via typed text if you don't feel like making requests out loud and ask Siri to use ChatGPT instead of Apple's own models to make requests.

Apple says its updated version of Siri is more context-aware of Apple products, allowing you to ask questions about how different features and settings work and get accurate responses. Onscreen awareness will let Siri understand and take action about things on your screen. So, if a friend sends an address in Messages, you can have Siri save it for you.

Apple CEO Tim Cook speaks during an announcement of new products on the Apple campus in Cupertino, Calif., Monday, June 10, 2024. (AP Photo/Jeff Chiu) (ASSOCIATED PRESS)

Beyond Siri, your devices can now prioritize your notifications to bring up the most important notes and minimize less relevant ones. Writing tools can rewrite, write, or summarize information for you, automatically available across Notes, Mail, and a host of third-party apps. You'll be able to create generative AI images of people, places, and animals across your apps in three different styles.

Apple says many of its generative AI models will run on-device, though some will need to access the cloud. But because Apple has traditionally eschewed forcing people to use cloud-based services when it comes to their private data, the company says it has developed a new cloud service called Private Cloud Compute.

Read more about the new announcements here.

Consumer expectations for stocks hit 3-year high in May

Mon, June 10, 2024 at 2:35 p.m. EDT, Josh Schafer

Consumers are the most bullish they've been on the outlook for stocks since May 2021.

The latest survey of consumer expectations from the Federal Reserve Bank of New York showed the mean perceived probability that stocks will be higher in the next 12 months rose to 40.5% in May, up from 38.7% in April.

The survey also showed consumers' expectations for inflation over the next year fell to 3.2% in May, down from 3.3% in April. Broadly, the New York Fed found households were feeling better about their financial situations as more respondents reported being "better off than a year ago" while fewer respondents noted they were "worse off."

The upbeat sentiment from consumers comes as stocks are near record highs. The S&P 500 (^GSPC) is up more than 12% this year, while the tech-heavy Nasdaq Composite (^IXIC) has risen more than 14%.

An increasingly positive corporate earnings outlook has prompted several analysts to upgrade their year-end S&P 500 targets. The Street-high year-end target for the S&P 500 has moved up to 5,600 from 5,200 at the start of the year.

Read more here.

Stocks reverse earlier losses

Mon, June 10, 2024 at 2:13 p.m. EDT, Alexandra Canal

It was a sea of green in late afternoon trading on Monday after all three major indexes reversed earlier losses to trade in positive territory.

The Dow Jones Industrial Average (^DJI) climbed around 0.1%, coming off a muted end to a winning week for the three major gauges. The benchmark S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) each rose about 0.2% and 0.3%, respectively.

Apple's 1 new feature I need to understand more about...

Mon, June 10, 2024 at 1:37 p.m. EDT, Brian Sozzi

Apple's (AAPL) WWDC is underway, and one new feature instantly caught my attention: tap to cash.

Apple is pitching it as a quick and private way to pay someone else by holding phones together.

This drop has sent shares of PayPal (PYPL) lower. Note PayPal owns Venmo.

S&P 500, Nasdaq rise as Dow slips

Mon, June 10, 2024 at 12:31 p.m. EDT, Alexandra Canal

US stocks mostly recovered from earlier losses as the benchmark S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) flipped into positive territory by afternoon trading while the Dow Jones Industrial Average (^DJI) dipped about 0.1%.

Yields edged higher with the 10-year Treasury (^TNX) rising about 3 basis points to trade near 4.46%.

Oil also moved to the upside, with West Texas Intermediate (CL=F) rising more than 2% to trade just over $77 per barrel. Brent (BZ=F), the international benchmark price, also climbed around 2% to hover above $81 a barrel.

All eyes on Fed's 'dot plot' this week

Mon, June 10, 2024 at 11:51 a.m. EDT, Alexandra Canal

It's a busy week on Wall Street with the Federal Reserve's interest rate decision on tap for Wednesday.

Along with its policy announcement, the Fed will release updated economic forecasts in its Summary of Economic Projections (SEP), including its "dot plot," which maps out policymakers' expectations for where interest rates could be headed in the future.

Yahoo Finance's Jennifer Schonberger breaks down what to expect:

Heading into this week, most market watchers believe policymakers will dial their expectations back. The question is by how much.

In March, the dot plot revealed a consensus among Fed officials for three cuts. Now that projection is in question following a string of sticky inflation readings, cautious commentary from Fed officials, and a US labor market that added more jobs than expected in May.

Most investors now expect little more than just one cut for 2024.

"I think the policy path will change a bit," said former Kansas City Fed president Esther George, who predicts the median among 19 policymakers could drop to one cut, even as a healthy number of officials still argue for two.

"My expectation is the dots will show and confirm what I think the market has picked up, and that is fewer rate cuts with the inflation forecast holding."

Fed Chair Jay Powell and his colleagues on the Federal Open Market Committee have been emphasizing they want to be sure inflation is moving "sustainably" down to their 2% target before starting cuts and that, in the interim, they expect to hold rates higher for longer.

That stance isn't expected to change this week. Officials are widely expected to hold the Fed’s benchmark rate steady on Wednesday, leaving it at a 23-year high.

Southwest stock climbs after Elliott Management discloses $1.9 billion stake

Mon, June 10, 2024 at 11:00 a.m. EDT, Alexandra Canal

Shares of Southwest (LUV) jumped as much as 8% on Monday after activist investor group Elliott Investment Management reported a $1.9 billion stake in the airliner and called for a leadership shake-up.

In a letter to the company's board of directors, Elliot said Southwest has suffered from "poor execution" and criticized its leadership team for "stubborn unwillingness" to evolve the company's strategy.

That's led to "deeply disappointing results for shareholders, employees and customers alike."

"After 18 months of intensive research, we are convinced that Southwest represents the most compelling airline turnaround opportunity in the last two decades," the firm wrote. "The significant investment we have made reflects our conviction that, with the right leadership, Southwest can regain its status as an industry-leading airline."

Southwest has struggled as a result of Boeing's ongoing safety issues, with the airliner referring to Boeing's delays as "significant challenges" for this year and 2025. It previously warned that the issues will result in slowing growth going into next year.

In a statement to Yahoo Finance, Southwest said in response: "We maintain an open dialogue with our shareholders and value their perspectives related to enhancing shareholder value."

"We were first contacted by Elliott yesterday and look forward to better understanding their views on our company. The Southwest Board of Directors is confident in our CEO and management’s ability to execute against the company’s strategic plan to drive long-term value for all shareholders, safely and reliably serve our customers and deliver on our commitments to all of our stakeholders."

With Monday's gains, shares of Southwest have risen about 2% compared with the S&P 500's (^GSPC) 12% rise over that same time period.

Nvidia begins trading after 10-for-1 stock split

Mon, June 10, 2024 at 10:15 a.m. EDT, Alexandra Canal

Nvidia stock (NVDA) began trading Monday on a new 10-for-1 split basis. That means one share of the artificial intelligence giant went from Friday's closing price of $1,208.88 to $120.88. The stock fell about 2% shortly after the opening bell.

Yahoo Finance's Dan Howley and Josh Schafer report:

The split means that owners of Nvidia common stock held as of the close of market on Thursday received 10 shares for each one share they held. For example, if a shareholder owned four shares of Nvidia as of Thursday, they'll now own 40 shares post-split.

Stock splits make owning shares of a stock more affordable by lowering the price of individual shares without diluting the value of existing shareholders' total holdings.

"The stock split is going to make Nvidia a lot more reachable for a lot of these retail traders," Option Research & Technology Services' Matt Amberson told Yahoo Finance last Thursday. "Now, you rarely see a stock over $1,000 with a 50% implied volatility, so the prices of the options are extraordinarily high, so options traders are really looking forward to the split."

Nvidia's split comes after the company's total market valuation briefly eclipsed $3 trillion on Wednesday, pushing the chip firm past Apple to become the second-most-valuable publicly traded US company.

Shares of Nvidia have skyrocketed thanks to the explosion in interest in generative AI that kicked off when OpenAI debuted its ChatGPT software in late 2022. Since then, hyperscalers like Amazon (AMZN), Google (GOOG, GOOGL), and Microsoft (MSFT) have been battling to get their hands on Nvidia's hardware to power their own generative AI platforms.

Stock splits are viewed by investors as a sign of strength, and consequently companies that split their stock typically outperform the S&P 500 in the year following their announcement.

On average, stocks rise 25% in the 12 months following the announcement of their split compared to an average return of 12% from the S&P 500 in the same time frame, per analysis from Bank of America. This has been true "across market regimes," BofA investment and ETF strategist Jared Woodard wrote in a note to clients.

Notably, the trend includes the time period from 2000 to 2009, amid the unwinding of the tech bubble. Nvidia shares are up about 27% since the company announced the split on May 22.

Stocks open lower ahead of big week

Mon, June 10, 2024 at 9:32 a.m. EDT, Alexandra Canal

US stocks edged lower to kick off a busy week on Wall Street that includes a Federal Reserve policy decision and key inflation data.

The Dow Jones Industrial Average (^DJI) hovered just below the flatline, coming off a muted end to a winning week for the three major gauges. The S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) each fell around 0.2% and 0.3%, respectively.

Your top retail stock in election season...

Mon, June 10, 2024 at 5:36 a.m. EDT, Brian Sozzi

JPMorgan (JPM) is digging into retail names and has emerged with its top play into an uncertain election season.

No surprise that it's Walmart (WMT), which is hot off a well-received annual shareholder meeting last week that saw it add Chipotle (CMG) CEO Brian Niccol to its board.

Here's more behind JPM analyst Chris Horvers's Walmart upgrade:

"We believe the stock adds a strong balance of defense and offense on both the top and bottom lines in a soft (to softening) consumer backdrop with a highly uncertain 2H24 ahead. Moreover, we believe estimates remain beatable while there is the potential for an uptick in the multiple as we expect WMT to go on a multi-year double-digit EPS growth algo given market share gains, rising alternative profit pool benefits, and International segment profit inflection."

RBC markets note making the rounds this AM

Mon, June 10, 2024 at 5:27 a.m. EDT, Brian Sozzi

A good note from RBC veteran strategist Lori Calvasina is making the rounds this morning.

"We continue to worry that market participants have gotten a little too optimistic about the timing of cuts. Friday’s jobs report didn’t do anything to alter that view given the strength of the payrolls number," Calvasina said.

She goes on to "stress test" her models, leaving her with two conclusions worth considering.

"One stress test bakes in no further Fed moves, stickier-than-expected inflation, and 10-year yields that don’t quite make it above 5%. That stress test points to around 4,900 on the S&P 500 on our EPS forecast and nearly 5,100 on consensus EPS," Calvasina wrote.

She added, "Another stress test bakes in a few more hikes, hotter inflation that breaks well above 3% on PCE, and a 10-year yield well north of last year’s high to 5.5%. That stress test pulls the trailing P/E down to 19.1x and points to about 4,500 for fair value for the S&P 500 on our EPS forecast and the 4,600-4,700 range using consensus EPS."

The S&P 500 is currently at 5,343.