Market Summary: S&P 500 Retreats as Tech Giants Falter
Despite a quarter marked by strong rallies fueled by anticipations of Federal Reserve rate cuts, stocks erased their gains on the last day. The S&P 500 reversed an earlier gain of nearly 1%, primarily due to losses in technology megacaps. Similarly, the Nasdaq 100 fell after just surpassing the 20,000 mark for the first time. Treasuries diminished their earlier gains following the release of economic data that supported a slower inflation outlook, yet swap traders are still forecasting nearly two rate cuts by the end of the year, with a quarter-point reduction fully expected by November.
On the corporate front, Nike Inc. saw its shares plummet nearly 20% following a disappointing earnings forecast. Meanwhile, Treasury 10-year yields climbed five basis points to 4.33%. In Europe, the French markets experienced a sell-off as uncertainty loomed over the upcoming Sunday elections.
Corporate Highlights:
- Uber Technologies Inc. (UBER) and Lyft Inc. (LYFT):The two companies have agreed to implement a series of worker benefits to settle a longstanding lawsuit in Massachusetts that challenged the employment status of drivers as independent contractors. This agreement avoids a potential voter referendum in November.
- Microsoft Corp. (MSFT):Microsoft’s recent $13 billion investment in OpenAI Inc. is set to face increased scrutiny from European Union antitrust regulators, who are preparing to investigate the AI firm’s exclusive use of Microsoft’s cloud technology.
- Nokia Oyj (NOK) :Nokia has announced a $2.3 billion acquisition of Infinera Corp., aiming to bolster its network products for data centers and expand its footprint in the US. This move comes as demand for server capacity surges, driven by the ongoing boom in artificial intelligence.
