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Stock Market News for June 28, 2024
Traders work on the floor of the New York Stock Exchange on June 18, 2024.
Spencer Platt | Getty Images News | Getty Images
US stocks fell on Friday as traders digested new economic data that indicated slower inflation as well as better-than-expected consumer sentiment numbers. Traders also concluded a strong first half of 2024.
O S&P 500 Index fell 0.41% to close at 5,460.48, while the Nasdaq Composite fell 0.71% to end at 17,732.60. Both averages hit new intraday highs earlier in the session before pulling back. The Dow Jones Industrial Average fell 45.20 points, or 0.12%, to close at 39,118.86.
Inflation in May slowed to its lowest annual rate in more than three years, the Commerce Department reported Friday. O price index of main personal consumption expenseswhich excludes more volatile food and energy prices, rose just 0.1% last month and 2.6% from a year earlier. Both estimates were in line with Dow Jones consensus estimates. The core PCE index is the Federal Reserve’s preferred measure of inflation. Headline PCE, which includes food and energy, was flat for the month and rose 2.6% year over year, also in line with expectations.
“From a market perspective, today’s PCE report was nearly perfect,” said David Donabedian, chief investment officer at CIBC Private Wealth US. “This was unequivocally a positive report.”
The University of Michigan’s consumer sentiment index for June came in higher than expected, rising to 68.2 from a preliminary reading of 65.6. The one-year inflation outlook fell to 3% from 3.3% expected in May.
Inflation statistics have been considered key by market participants as they try to guess when the Federal Reserve will start cutting interest rates. Traders are currently betting on a 64.1% probability of the central bank lowering rates at its September meeting, according to CME Group’s FedWatch tool.
The market officially ended the first six months of 2024 with Friday’s closing bell.
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The performance of the S&P 500, the 30-stock Dow Jones, and the Nasdaq Composite in 2024
The tech-heavy Nasdaq led the way in the first half, rising 18.1% as the artificial intelligence craze captured investor enthusiasm. The broad-based S&P 500 jumped 14.5%, while the blue-chip Dow lagged with a gain of about 3.8%. Nvidia shares fell 0.4% on Friday.
The AI theme “has dominated the entire year and really driven the concentration in the overall market,” said Mike Dickson, head of research and quantitative strategies at Horizon Investments. “That has resulted in a very strong year.”
Part of the reason for the Dow’s underperformance stems from an idiosyncratic pullback in the second quarter. The Dow fell 1.7% during the period, while the S&P 500 and Nasdaq rose 3.9% and 8.3%, respectively, during the same period.
All three gained ground in June, marking their seventh positive month in eight. The Nasdaq once again led the pack with a month-to-date rally of nearly 6%. The S&P 500 and Dow gained 3.5% and 1.1%, respectively.
So far this week, the Nasdaq has added 0.2%. The S&P 500 and the Dow have both fallen less than 0.1%.
“Equity markets have been resilient” in the first half of the year, said John Luke Tyner, portfolio manager at Aptus Capital Advisors.
For the market to reach all-time highs in the last half of the year, Tyner thinks the market will need more participation. He noted that events such as the election, the timing of rate cuts and indications of waning consumer demand could weigh on markets.
“If all of these things happen, we could see more volatility,” Tyner said. “Overall, everyone is enjoying the last 10 months of the market because it’s been easy, [but] At some point, complacency has to end.”
Nike shares fell nearly 20% after the sporting goods retailer cut its full-year guidance. Foot cabinet shares fell more than 2% in sympathy.