Everything to Know about Macro and Markets
Stocks closed slightly lower after a volatile session on Friday, as another batch of stronger-than-expected jobs data dented hopes for a Fed interest-rate decrease in September. Despite the daily loss, major stock benchmarks ended the week higher, thanks to NVIDIA (NVDA)-led rally earlier in the week, which propelled the S&P 500 (SPX), Nasdaq Composite (NDAQ), and Nasdaq-100 (NDX) to all-time highs on Wednesday. The Dow Jones Industrial Average (DJIA) also locked in a weekly gain.
All Eyes on Macro and the Fed
May’s nonfarm payroll growth strongly accelerated from April, marking the 41st consecutive month of increases, with the economy adding jobs at a rate well above pre-pandemic trends. In addition, hourly earnings were also higher than expected, showing a strong increase month-over-month and on an annual basis. Although the unemployment rate inched higher in May, it still marked the 30th straight month with rates at or below 4%, the longest such stretch in at least 50 years.
The apparent strength of the U.S. job market contradicts the downbeat economic reports received earlier in the week, which included a downward revision of first-quarter GDP and data pointing to weakening consumption and manufacturing. While payroll data significantly lowered chances for an imminent monetary easing, some investors also took it as a sign of the diminishing possibility of stagflation – a low-growth, high-inflation economic environment.
Market participants are now awaiting the all-important CPI report, due on Wednesday – the same day that the Federal Reserve’s committee members gather for their policy meeting. While policymakers will certainly keep rates on hold for another month, investors will look for a possible change of tone or other clues that might shed some light on the central bank’s further steps.
Large Gets Larger
NVIDIA (NVDA) rallied through Wednesday, with its market capitalization briefly crossing the $3 trillion mark. Although the AI chip leader gave back some of those gains later in the week, it still surged by over 6%, with the year-to-date rally adding up to 151%.
Investors flocked to NVIDIA’s stock since it posted outstanding quarterly results and guidance, amassing positions just before its 10-to-1 stock split performed on Friday after hours. Trading in split-adjusted shares will start on Monday.
As NVIDIA competes with Apple (AAPL) for the badge of the world’s second most valuable company after Microsoft (MSFT), these three largest S&P 500 stocks now account for 20% of the index’s market capitalization. NVIDIA alone accounts for more than a third of the S&P 500’s gain this year.
Stocks That Made the News
¤ Cybersecurity leader CrowdStrike Holdings (CRWD) is set to join the S&P 500 index at its next quarterly rebalancing on June 24th, along with private-equity firm KKR & Co. (KKR) and web hosting provider GoDaddy (GDDY). CrowdStrike’s shares surged by over 9% in the past week after the company reported strong financial results for its fiscal Q1 2025.
¤ Hewlett Packard Enterprise (HPE) surged by over 12% last week after the company posted better-than-expected quarterly results powered by its AI server business.
¤ Samsara (IOT) saw its stock plunge by more than 11% even as the Internet of Things company released quarterly results beating expectations and raised full-year guidance. Analysts suggest that the sell-off occurred on the back of IOT’s valuation, which some investors perceive as unsustainable.
¤ Dollar Tree Inc (DLTR) slumped after the discount retailer posted a softer-than-expected current-quarter earnings forecast and announced a review to explore the potential sale of Family Dollar.
¤ Boeing (BA) jumped by almost 7% over the week, clawing back some of its year-to-date losses, after Boeing’s Starliner capsule became the second U.S. manned spacecraft – after SpaceX’s Dragon – to successfully dock with the International Space Station.
¤ The most feverish action was seen last week in the meme-stock GameStop (GME), with a surge of over 56% on Wednesday followed by a subsequent plunge from these heights, which left the stock down 39% for the week. The strong support voiced by Meme King Keith Gill, aka “Roaring Kitty”, hasn’t succeeded in saving the video game retailer after it reported a larger-than-expected bottom-line loss and announced additional stock issue.
Upcoming Earnings and Dividend Announcements
The Q1 2024 earnings season has ended, but some notable reports are still scheduled for this week, coming from firms whose fiscal year differs from the calendar year.
This week, investors will follow the reports scheduled to be published by technology heavyweights Oracle (ORCL) and Broadcom (AVGO), as well as the creative software provider Adobe (ADBE).
Ex-dividend dates are coming this week for Nvidia (NVDA), HP (HPQ), Taiwan Semiconductor Manufacturing (TSM), Meta Platforms (META), Coca-Cola (KO), Altria Group (MO), Gilead Sciences (GILD), Occidental Petroleum (OXY), and other dividend-paying firms. In addition, June 10th is the ex-date for Alphabet’s (GOOGL) first-ever dividend payment.
For more exclusive market insights and content from TipRanks Macro & Markets research analyst Yulia Vaiman, click here.
