Dow falls 400 points to kick off June trading on concerns about the economy: Live updates
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| Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., June 3, 2024. |
Stocks fell as weak U.S. manufacturing data on Monday raised concerns about the strength of the economy. Banks, industrial companies and other stocks that depend on economic growth led the decline.
The Dow Jones Industrial Average fell 400 points (about 1%), with Caterpillar and Goldman Sachs the biggest losers. The S&P 500 fell 0.6% and the Nasdaq Composite fell 0.2%. U.S. manufacturing showed signs of slowing. The ISM manufacturing index was at 48.7 in May, pushing down U.S. Treasury yields. A reading below 50 indicates a contraction. Wall Street is having a strong month, with both major three-month averages posting their sixth positive month in the past seven months. The Nasdaq rose 6.9% in May, its best month since November 2023.
But the upward momentum appeared to fade toward the end of the month. While the Dow Jones Industrial Average rose more than 500 points on Friday, all three averages finished May more than 1% below their all-time highs. The Nasdaq fell 1.1% last week as semiconductor stocks such as Nvidia slumped. Nvidia regained some of its ground on Monday as the rest of the market slid. The artificial intelligence darling rose 2% after unveiling a new kind of AI chip, replacing its predecessor in just three months.
"Technicals remain tight, there's some fear in the air, and sentiment appears bullish, but we maintain our expectation of more volatility going into the summer," Chris Seniek, chief investment strategist at Wolf Research, said Monday. The first week of June will be packed with more economic updates. Investors await ADP's private payroll report on Thursday, followed by May's jobs report on Friday. Investors appear to be hoping for a slowdown in the economy that could give the Fed the green light to cut interest rates. However, the slowdown must not become too severe or fears of a recession could grow.
Technical issues at the New York Stock Exchange affected the prices of several stocks on Monday morning, but trading returned to normal around midday. Check out midday stock price action.These were some of the stocks with notable price movements at midday:Spotify - The music streaming company rose 4% after announcing a price increase for its premium subscriptions in the U.S. in July.
Paramount Global – The media company rose more than 7% after CNBC’s David Faber reported that the company and Skydance had agreed to merger terms. Cava – Shares fell about 5% after JPMorgan downgraded the stock to neutral from overweight. – Alex Harring Paramount shares rise as Skydance deal nears finish line. Paramount shares rose nearly 7% on Monday after the company appeared to be close to closing a deal with Skydance, private equity firm Redbird Capital and KKR.
CNBC’s David Faber reported Monday, citing people familiar with the matter, that the deal is expected to be announced soon, pending approval from Paramount majority shareholder Shari Redstone. “It should be something that everyone can be reasonably happy with,” Wells Fargo analyst Steven Cahall said in a client note detailing the offering. "If Shari accepts the Skydance transaction as recommended by the board, more details may become available this week, after which the market will be able to judge for itself Skydance's strategic plan against the proposed $15 per share dividend.
/APO was deemed too risky for regulatory reasons and may ultimately have brought desirable improvements to Skydance's service," the statement said. - Jesse Pound Technical issues related to new software affect 40 tickers used by the Consolidated Tape Association, an organization that jointly provides real-time stock quotes. The major exchanges that jointly provide real-time stock quotes provided more details on the cause of the technical issues on Monday. She said there were issues with limit up and limit down price bands that could be related to the new software version. A total of 40 tickers were affected by the incorrect price ranges between 9:30 a.m. and 10:27 a.m., the group said in a statement.
The CTA had previously said 49 stocks were affected, but later corrected the figure. – Yun Li U.S. crude oil prices fell more than 3% as OPEC+ plans to phase out voluntary cuts. Crude oil prices fell more than 3% on Monday, trading below $75 a barrel, after OPEC+ announced plans to reverse voluntary production cuts totaling 2.2 million barrels per day. The coalition of eight OPEC+ member countries, led by Saudi Arabia and Russia, announced on Sunday that they would phase out those cuts over a 12-month period starting in October. According to the plan, more than 500,000 barrels per day are expected to return to the market by December and more than 1.8 million barrels per day by June 2025.
"Some are interpreting OPEC's statement as pessimistic, especially the part about lifting the voluntary production cuts," said Helima Croft, head of global commodity strategy at RBC Capital Markets. "They've made it pretty clear that this is data-dependent," Croft said. "If the fundamentals at the end of August are even worse than they are now, they'll pause this approval." - Spencer Kimball: Structure Therapeutics shares soar more than 60% on hopes of weight-loss drug.
Despite all the hype surrounding Ozempic and new GLP-1 obesity treatments, many patients still prefer to swallow a pill than get an injection once a week. Unfortunately, finding a pill that's both safe and effective has proven difficult. That's why investors are excited about new clinical data from Structure Therapeutics on Monday. The stock jumped more than 60% in trading after a mid-stage clinical trial showed that patients enrolled in the study lost 6% weight after taking GSBR-1290 for 12 weeks. Notably, the results were in competition with an experimental drug being developed by Eli Lilly.
NYSE Reports Technical Issues Resolved The New York Stock Exchange said on Monday that initial technical issues have been resolved and trading is returning to normal, but issues stemming from price ranges caused dramatic price declines similar to those seen in Warren Buffett's Berkshire Hathaway shares. Barrick Gold and NuScale Power are the guides. Berkshire's Class A shares fell 99.97% at one point before trading resumed for all three. The exact number of stocks affected by the technical issues is unclear.
The disruption does not appear to have had a significant impact on the value of the major market averages. - Yun Lee, Jesse Pond India ETF Aims for Best Session in More Than Two Years The iShares MSCI India ETF (INDA) is on track for its best day in more than two years. The fund rose more than 3% in Monday trading, hitting a new 52-week high. If the rally continues through the close, it will be the best day since March 9, 2022, when the exchange-traded fund rose more than 4%. Monday's moves come in the wake of the country's recent elections.
Post-election polls suggest Prime Minister Narendra Modi and his allies are headed for a third consecutive term in power, which would be considered unusual. The Institute for Supply Management's report on Monday showed that the ISM manufacturing index for the month was 48.7, a measure of the percentage of companies that reported growth. In the ISM economic survey, any reading below 50 indicated a decline, and the price index fell 3.9 points to 57, but the employment index rose 2.5 points to 51.1, moving into expansionary territory. - Jeff Cox S&P 500 opens higher,
NVIDIA gains The S&P 500 opened higher on Monday, with NVIDIA shares also rising at the start of trading in the first week of June, with the broad market index up 0.3% and the Nasdaq Composite up 0.7. %. The Dow Jones Industrial Average rose 22 points, or 0.06%, while NVIDIA shares rose nearly 4%. - Brian Evans Spotify and Cava were among the biggest movers before the market opened Check out the companies that made headlines before the market opened: Spotify - Shares of the music streaming service rose 4.8% after trading on Monday. Spotify Premium subscription fees will increase in the U.S. starting in July.
MarineMax - Recreational boat and yacht services company MarineMax rose 19% after reports that OneWater Marine is in talks to acquire the company for $40 per share in cash. Bloomberg first reported the agreement, citing people familiar with the matter. Cava – The Mediterranean fast-casual restaurant chain fell nearly 2% after JPMorgan cut its rating to neutral from overweight. – Pir Singh Bull market in early stages, says Yardeni According to Ed Yardeni, president of Yardeni Research, the market is still in the early stages of a bull market. “I think it’s still relatively early,” Yardeni told CNBC’s “Squawk Box.”
“Some people say we’re in the middle of a cycle, or that the story is nearing its end, but I don’t think that’s the case,” Yardeni said, noting continued strong productivity is likely. He sees parallels between now and the 1920s in terms of technology-driven improvements in living standards, but he doesn’t necessarily expect a repeat of the crash of nearly a century ago. As part of his outlook for the Roaring '20s, Yardeni sees the S&P 500 index closing at 5,400 in 2024, 6,000 in 2025 and 6,500 in 2026. The end-2024 forecast implies a 2.3% increase from Friday's closing price."
- Alex HarringStericycle
Acquisition News Surge The company's shares rose more than 7% in premarket trading on news that waste management company Stericycle will acquire the company for $7.2 billion. Waste Management will buy Stericycle for $62 per share, a roughly 20% premium to Stericycle's closing stock price on Friday. - Brian Evans GameStop shares surge 74% after latest "Roaring Kitty" post GameStop shares surged more than 74% amid speculation that Keith Gill, who helped spark the 2021 short squeeze, could take a big position in the video game retailer.
Gill, who goes by the name DeepF------Value on Reddit and on YouTube and social media site Value, has a $115.7 million Value. The image also showed 120,000 call options on GameStop. European markets open higher European markets started the month higher on Monday, extending last week's gains as investors await the European Central Bank's latest interest rate decision later this week. The UK's FTSE 100 index rose 0.63% to 8,326, Germany's DAX index rose 0.79% to 18,648, and France's CAC index rose 0.72% to 8,050. Italy's MIB rose 0.8% to 34,762.
European Market Tickers Company Percentage Change in Price .FTSE FTSE 100 8262.75 -12.63 -0.15 .GDAXI DAX 18608.16 110.22 0.6 .FCHI CAC 40 Index 7998.02 5.15 0.06 .FTMIB FTSE MIB 346 70.06 177.65 0.52 .IBEX IBEX 35 Idx 11397.2 75.2 0.66
South Korea Energy Stocks South Korea energy stocks rise as government gives green light to exploration plans South Korean energy stocks rose after the government gave the green light for test drilling of vast oil and gas reserves off the country's east coast. Shares in Korea Gas Corp surged 29.87 percent.
Daesung Energy rose 28.25%, SK Innovation rose 7.9% and SK Gas rose 15.97%. South Korean President Yoon Seok-yeo said at a press conference that the region is "highly likely" to hold up to 14 billion barrels of oil and gas. - Lee In-shang
India Stocks Reach Intraday Highs as Exit Polls Favor Modi’s BJP-Led Alliance
Indian stock markets surged to intraday record highs, with the Nifty 50 index climbing approximately 3% and the S&P BSE Sensex Total Return index increasing about 2.6%. Exit polls over the weekend indicated that Prime Minister Narendra Modi and his Bharatiya Janata Party (BJP)-led alliance are likely to secure a third consecutive term in power. According to a summary from local news channel NDTV, the BJP-led National Democratic Alliance is projected to win around 365 out of 543 seats in the lower house of India's parliament. However, the final results, expected on Tuesday, may differ from these projections.
— Shreyashi Sanyal, Charmaine Jacob
China’s May Factory Activity Grows at Fastest Pace in Nearly Two Years, Exceeding Estimates
A private survey revealed that China’s manufacturing activity grew at its fastest pace in nearly two years in May, contrasting with official data. The Caixin survey reported that the seasonally adjusted manufacturing PMI rose to 51.7 in May from 51.4 in April, the highest since June 2022 and surpassing a Reuters poll forecast of 51.5. This private survey followed official data showing an unexpected contraction in China’s manufacturing sector in May. The Caixin survey also noted positive sentiment among Chinese manufacturers, driven by hopes for improved market demand both locally and internationally, supporting higher production this year.
— Shreyashi Sanyal
South Korea’s May Manufacturing PMI Expands at Fastest Pace in Nearly Three Years
A private survey indicated that South Korea’s manufacturing activity expanded at its fastest pace in nearly three years in May. The headline manufacturing Purchasing Managers’ Index rose to 51.6 in May from 49.4 in April, marking the strongest growth since July 2021. Joe Hayes, principal economist at S&P Global Market Intelligence, stated that after a period of plateaued recovery efforts, growth surged in May due to stronger demand conditions domestically and abroad, driving production growth to its highest in nearly three years.
— Shreyashi Sanyal
Nvidia Announces Latest AI Chip Model
Nvidia unveiled new artificial intelligence chips on Sunday, even before its latest model has been shipped to customers. The new chip model is named “Rubin,” following the announcement of the “Blackwell” chips in March. CEO Jensen Huang announced that Nvidia plans to release new AI chip models on an annual basis. Nvidia’s stock has risen over 120% year to date, despite competition from other major tech companies.
— Jesse Pound, Rebecca Picciotto
Stock Futures Open Little Changed
Stock futures showed minimal movement shortly after 6 p.m. in New York, with the three major contracts within 0.2% of the flatline.
— Jesse Pound
Key Economic Reports This Week
Here are some notable economic and corporate updates scheduled for this week (all times ET):
Monday, June 3:
- 10 a.m. Construction spending (April)
- 10 a.m. ISM manufacturing (May)
Tuesday, June 4:
- 10 a.m. JOLTS job openings (April)
- Earnings: Hewlett Packard Enterprise, Bath & Body Works
Wednesday, June 5:
- 10 a.m. ISM services PMI (May)
- Earnings: Campbell Soup, Dollar Tree
Thursday, June 6:
- 8:30 a.m. Initial jobless claims
- Earnings: J.M. Smucker Co.
Friday, June 7:
- 8:30 a.m. May jobs report
— Jesse Pound, Sarah Min
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