- Netflix gains after Wells Fargo raises PT
- Coinbase rebounds a day after hitting seven-month low
- Indices: Dow up 0.04%, S&P down 0.28%, Nasdaq down 0.74%
June 7 (Portal) – The S&P 500 and Nasdaq gave up early gains and fell on Wednesday as tech stocks reversed course as investors waited for inflation data and next week’s Federal Reserve monetary policy meeting.
Major tech and growth stocks fell between 0.1% and 3.1%, except for Netlfix (NFLX.O) and Tesla (TSLA.O), which rose 1.1% and 1.8%, respectively.
More than half of the S&P subsectors declined, led by Communication Services (.SPLRCL) which lost 1.4%.
Inflation data in the US are expected to show that consumer prices moderated slightly in May compared to the previous month, although core prices are likely to have remained elevated.
Equities were under pressure: US 2-year Treasury yields and 10-year Treasury yields rose after the Bank of Canada hiked interest rates, fueling market concerns about the Fed’s interest rate decision.
According to the CME’s Fedwatch tool, money market participants now see a 69% chance that the Federal Reserve will skip the rate hike at its June meeting but hike it in July, up from almost 77% previously.
U.S. stocks were recently boosted by a rally in mega-cap stocks and a stronger-than-expected earnings season, with the S&P 500 (.SPX) gaining almost 20% from its October 2022 lows.
Wednesday’s decline reflects investors’ lack of confidence in the sustainability of the rally, which depends on a small concentration of big names, said Peter Andersen, founder of Andersen Capital Management.
Some analysts say big tech stocks and other key growth stocks could soon see profit-taking.
Meanwhile, the CBOE Volatility Index (.VIX) hit its lowest level since February 14, 2020.
According to Refinitiv, Wells Fargo has raised its price target for Netflix stock to $500 from $400 per share, the highest on Wall Street.
The Energy Index (.SPNY) rose 2.5% after oil prices edged higher, while the KBW Regional Banking Index (.KRX) hit a 2-month high.
As of 11:59 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 14.33 points, or 0.04%, to 33,587.61, and the S&P 500 (.SPX) was down 12.17 points, or 0.28% 4,271.68 and the Nasdaq Composite (.IXIC) fell 97.80 points, or 0.74%, to 13,178.62.
Among others, shares of Yext Inc rose 36.1% after the New York-based online marketing company raised its full-year earnings guidance.
Campbell Soup (CPB.N) fell 6.3% after the packaged food maker reported a lower gross margin in the third quarter, hurt by high raw material and freight costs.
Coinbase (COIN.O) shares rose 2.2% after hitting a seven-month low on Tuesday, when the Securities and Exchange Commission sued the largest U.S. crypto exchange, accusing it of operating illegally without first contacting the to have registered with the supervisory authority.
Cathie Woods Ark Invest bought 419,324 shares from Coinbase on Tuesday.
The rising issuance outpaced the falling issuance on the NYSE by a 2.04 to 1 ratio and by a 1.37 to 1 ratio on the Nasdaq.
The S&P index made 17 new 52-week highs and no new lows, while the Nasdaq made 109 new highs and 23 new lows.
Reporting by Shubham Batra and Shristi Achar A in Bengaluru. Edited by Vinay Dwivedi
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Shristi Achar A