Stock Market News for Monday, June 10, 2024: Dow Edges Higher; Nvidia, Apple, GameStop, Southwest Airlines, Tesla, AMD, and More Movers; Treasury Yields Rise (2024)

What Happened Today

The Fed delivers its latest decision on Wednesday, the same day new data for the consumer price index are released. While traders earlier this year had hoped for rate cuts by now, inflation has remained sticky and growth hasn’t cooled much.

Traders now see the Fed waiting until at least September before cutting rates, according to the CME FedWatch tool.

Traders are also anticipating news from Apple's Worldwide Developers Conference.

For live coverage and analysis of the event, click here.

The S&P 500 and Nasdaq Composite closed at records on Monday even though Apple's artificial intelligence updates underwhelmed.

The Dow Jones Industrial Average rose about 69 points, or 0.2%. The S&P 500 was up 0.3%. The Nasdaq Composite was up 0.4%. The S&P 500 marked its 26th record close of the year.

The yield on the 2-year Treasury note rose to 4.883%. The 10-year yield rose to 4.468%. Bond yields jumped after an auction of 3-year notes attracted weak demand.

Apple stock also fell despite a wave of AI announcements, including a deal with OpenAI that will allow Siri to ask the chatbot for assistance, with user permission. Instead of AI excitement, it was utilities and energy stocks leading the way.

Traders will now turn their attention to Wednesday’s Federal Open Market Committee decision and the release of the consumer price index for April.

David Donabedian, chief investment officer of CIBC Private Wealth US, writes that investors will focus on Fed officials' economic projections, and whether members reduce their forecast for rate cuts to match market expectations of two or fewer cuts.

Traders will also parse through the FOMC’s statement on inflation progress.

“Last meeting the Fed was disappointed, citing a ‘lack of progress.’ Since then, inflation data has been a bit better,” Donabedian writes. “So we expect a slightly more optimistic tone on the progress of inflation. If the FOMC language does not change, this will be taken negatively by the markets.”

The S&P 500 might hit another record on Monday for the 26th time this year. Bullish investors are driving up the index, but that’s only half the story.

S&P implied correlations are marking new lows. The COR6M Index, which measures the correlation among individual stocks within the S&P 500 over the next six months, fell to an all-time low of 15.6% last week, according to Mandy Xu, Cboe’s VP Head of Derivatives Market Intelligence. It’s currently at 15.95%, near its historical low.

It implies that investors are anticipating a big divergence in the performance of individual stocks through most of the year compared with a broad market movement that affects most stocks similarly.

Another way to think about is this: Investors on the surface see no big macroeconomic worry that can hit the S&P 500, but when they look closer they see opportunities in individual stocks that are benefiting from artificial intelligence, the rise in commodity prices, or the downshift in consumer spending.

This is a way to show that there’s a bigger market for stock picking rather than darting in and out of the various indexes and sectors that make up the market.

The S&P 500 is on pace to hit its 26th record close for the year amid continued uncertainty on the timing of Federal Reserve interest rate cuts.

The main market index was up 0.2% Monday as the trading day headed into the last hour of regular trading. The index has already marked the most records in the first half of a single year since 2021, when it set 34 records, according to Dow Jones Market Data.

Today’s high would come despite looming questions about the Fed’s Summary of Economic Projections, which is scheduled to be released this Wednesday. In March, the report showed an expectation of three cuts in 2024. Now economists are divided on whether the latest report will be revised down to two, one, or possibly no cuts.

“We think the economy can handle rates at current levels and that cutting preemptively would be a mistake because it would fuel a stock market meltup,” wrote Ed Yardeni, president of Yardeni Research. He’s on team one rate cut.