Nasdaq leads stock market gains, GameStop surges

The tech-heavy Nasdaq Composite Index (^IXIC) and the benchmark S&P 500 Index (^GSPC) rose on Monday, as U.S. stocks look to get off to a strong start in June amid renewed hopes of interest rate cuts and a resurgence of meme stock fever.

The Nasdaq and S&P rose about 0.8% and 0.4%, respectively, as Nvidia (NVDA) shares surged following an update to its AI chips. The Dow Jones Industrial Average (^DJI) was more or less flat.

A surge in GameStop Corp. (GME) shares has garnered attention and renewed speculation of a return to a 2021-like meme rally. The company's shares surged more than 100% in early trading after a Reddit post apparently written by influence trader Keith Gill (aka “Roaring Kitty”) laid out a big bet. Shares of fellow meme-popular AMC (AMC) also surged 27% in the wake of the move.

GME shares, which were temporarily halted due to volatility, pared gains by about 50% immediately after the open.

Overall, stocks are on track to build on a strong performance in May, when all three major indicators hit new records. The mood was further brightened by the PCE data, which stoked hopes of a pick-up in inflation and optimism that the Federal Reserve will be more open to lowering borrowing costs.

read more: How does the labor market affect inflation?

With that in mind, May employment and other labor data due later this week will be a test of investor sentiment toward the Fed's policies: Traders are now more likely than a week ago to expect the Fed to cut rates in September, according to the CME FedWatch tool.

Meanwhile, NVIDIA shares rose as the AI craze that has fueled the tech industry rekindled. Shares rose about 4% in early trading after the company unveiled a new AI platform and pledged to speed up the pace of model upgrades. Rival AMD (AMD) shares also rose as it unveiled its own new AI lineup and development plans.

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Monday, June 3, 2024 at 7:07 a.m. PDT

ISM report points to further contraction in manufacturing activity

The latest data released on Monday showed mixed results for manufacturing activity in May.

The Institute for Supply Management's (ISM) manufacturing PMI showed that manufacturing activity contracted further in May, while the S&P Global index showed that manufacturing activity grew more in May than initially thought.

The ISM manufacturing PMI fell to 48.7 in May from 49.2 the previous month and below economists' expectations of 49.5, according to Bloomberg data.

“U.S. manufacturing activity continued to contract after growing in March, the sector's first expansion since September 2022,” Timothy Fiore, chairman of the ISM Manufacturing Business Research Committee, said in a company statement. “Demand weakened again, production stabilized, and inputs remained accommodative.”

Fiore added: “Demand remains uncertain as current monetary policy and other factors make companies reluctant to invest.”

The S&P Global manufacturing PMI released on Monday showed U.S. manufacturing activity rose to 51.3 from 50.9 the previous month, with new orders for the sector beginning to increase again.
Monday, June 3, 2024 at 6:32 AM PDT

Nasdaq, S&P 500 rise at open

Markets began mostly higher on Monday, the first trading day of June.

The tech-heavy Nasdaq Composite Index (^IXIC) and the benchmark S&P 500 Index (^GSPC) rose about 0.8% and 0.4%, respectively, while the Dow Jones Industrial Average (^DJI) was more or less unchanged.

A surge in GameStop Corp. (GME) shares has garnered attention and renewed speculation of a return to a meme rally like the one seen in 2021. GME shares rose roughly 64% in the early hours of trading before being halted due to volatility.
Monday, June 3, 2024 at 4:52 AM PDT

Ford CEO speaks to Yahoo Finance about EV benefits

Ford (F) CEO Jim Farley said on a new episode of Yahoo Finance's “The Opening Bid” podcast that the company has a timeline in mind for when it will be profitable on electric vehicles.

But he wouldn't tell me that at the Detroit conference! Ford is on track to lose about $5 billion on its EV division this year.

However, I appreciated Farley's focus on running a profitable EV business, which includes streamlining costs and slowing down the aggressive EV factory construction timeline.

Listen to the full episode below and on all major podcast platforms including Spotify, Apple, Amazon, Pandora and iHeartmedia.
Monday, June 3, 2024 at 2:42 AM PDT

NVIDIA remains strong on sentiment

NVIDIA (NVDA) shares rose 3% in premarket trading after founder Jensen Huang gave another well-received presentation at Computex in Taipei.

Most importantly, Nvidia announced its next-generation AI chip called Rubin, which is great since Nvidia only announced their new AI chip in March.

“Taken together, we think the four announcements nicely represent NVIDIA's efforts to lean on its existing AI accelerator advantages to establish a strong presence in the company's largely untapped potential $1 trillion+ market for accelerated computing, from AI networking to the largely CPU-centric server market,” Citi analyst Atiq Malik said in a client note.

Not surprisingly, Malik maintained his buy recommendation on Nvidia shares.

Get the latest on Nvidia through Yahoo Finance's recent exclusive interview with Huang.
Monday, June 3, 2024 at 2:33 AM PDT
Software stock mood after Salesforce shocking news

Salesforce (CRM) earnings last week were a real sour note for tech bulls.

They aired their concerns last weekend at a high-profile Jefferies technology conference in Newport Beach.

Here are some key takeaways from Jefferies technology analyst Brent Till.

“Macro headwinds persist. Investor sentiment towards the software industry remains negative as companies report a challenging macro environment. Weakness is broad-based across front-office, back-office, large enterprises and small businesses. Workday (WDAY) and Salesforce both highlighted weak growth in EMEA.”

“AI crowding out. Despite long-term industry tailwinds around AI, investors are concerned that budgets will shift away from software in the near term as companies focus on semiconductors and hardware.”
Monday, June 3, 2024 at 2:25 AM PDT

June Stock Information

June is the second worst performing month for the S&P 500 in the past 15 years.

Helpful chart from BTIG this morning.

June is often a difficult month for the market. (BTIG)
Monday, June 3, 2024 at 2:21 AM PDT

Gamestop explodes

And so the week begins…

Shares of GameStop (GME) rose 85% in premarket trading after meme mogul Keith Gill revealed a $116 million stake in the video game retailer on Reddit, his first posting in three years, and was up 103% at one point.

It should be noted that this post, as well as one posted from his X account a few weeks ago, could not be verified.

All I can say about this is to be careful!

If anything, doing some research on Reddit (RDDT) is the real aim given the increased activity on the platform, so let’s start our fact-finding mission here.