AAPL
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NVDA
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Tech Stocks Drive S&P 500 to Record High
The S&P 500 reached a new record high of 5,473.23, driven by gains in mega-cap tech stocks. The index increased by 0.77% during Monday’s trading session. This surge was led by major tech companies such as Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), and Meta Platforms (NASDAQ: META), which all closed higher. Consequently, the information technology sector rose by 1.2%.
The Nasdaq Composite also saw an increase of 0.95%, ending at 17,857.02. Both the S&P 500 and the Nasdaq posted their seventh weekly gain in eight weeks. The Dow Jones Industrial Average closed up by 0.49%, ending a four-day losing streak.
Premarket Movers:
| Company | Stock Change | Reason |
|---|---|---|
| Chegg (NYSE:CHGG) | +18% | Announced plans to slash 23% of its global workforce as part of a broader restructuring push. |
| Lennar (NYSE:LEN) | -2.7% | Forecast its third-quarter home deliveries below expectations, indicating sluggish demand as mortgage rates hover at a two-decade high. |
| GameStop (NYSE:GME) | -2.6% | Continued losses after CEO Ryan Cohen announced plans to operate a smaller network of stores. |
| Tesla (NASDAQ:TSLA) | -0.4% | Initiated its battle for legal recognition of CEO Elon Musk's $56 billion pay package. |
| Apple (NASDAQ:AAPL) | +0.5% | Scrapped its "buy now, pay later" service in the U.S., ending the offering a little over a year after its announcement. |
| Merck (NYSE:MRK) | +1.4% | Received U.S. FDA approval for its next-generation vaccine to protect adults against pneumococcal disease. |
| La-Z-Boy (NYSE:LZB) | +9.7% | Reported a robust finish to its fiscal year 2024, with fourth-quarter earnings and revenue surpassing expectations. |
| Boeing (NYSE:BA) | -0.4% | GE Aerospace CEO Larry Culp declined the planemaker’s request to consider taking over as the chief executive. |
"Apple Pay Later" Discontinued
Apple (NASDAQ: AAPL) announced that it will discontinue its Apple Pay Later program, which was launched just last year. The program allowed customers to pay for purchases up to $1,000 in four interest-free installments.
Moving forward, Apple plans to integrate installment loans into its Apple Pay checkout process through third-party companies such as Affirm, as well as through credit and debit cards from issuers like Citigroup. Existing users with open loans will still be able to access the Apple Pay Later features to pay off their loans.
U.S. Retail Sales Below Expectations
In May, U.S. retail sales grew by only 0.1%, missing economists' expectations of a 0.3% increase. This slow growth is attributed to lower prices for gasoline and motor vehicles, which affected receipts at service stations and auto dealerships. April’s retail sales were revised down to a 0.2% drop from the previously reported flat performance. Despite these revisions, the trend shows a slowdown in sales growth due to higher prices and interest rates, which force households to prioritize essential spending over discretionary items.
The Federal Reserve recently kept its benchmark overnight interest rate within the 5.25%-5.50% range, where it has been since last July. Fed officials suggested that rate cuts might not start until December and projected only a single quarter-percentage-point reduction for this year. Despite this, they maintained their gross domestic product (GDP) growth estimates. Core retail sales, excluding automobiles, gasoline, building materials, and food services, rose by 0.4% in May after a revised 0.5% drop in April. Consumer spending, which corresponds closely with core retail sales, increased at a 2.0% annualized rate in the first quarter, supporting the economy's 1.3% growth pace. Estimates for second-quarter growth are as high as 3.1%.
Nvidia's Rising Influence in Tech Index
Nvidia's (NASDAQ: NVDA) influence in the Technology Select Sector SPDR Fund (XLK) is set to increase significantly.
The index's rebalancing calculations show Nvidia’s weighting rising to 21%, up from 6% as of June 14. Microsoft will remain the top stock in the index with a weighting of around 21%, while Nvidia will be a close second. In contrast, Apple’s weighting is expected to drop significantly to 4.5%, down from 22% as of June 14, according to Matthew Bartolini, head of SPDR Americas Research.
