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Stock Market Today: S&P 500 snaps win streak as rising yields steal Nvidia's shine

Published 2024-05-22, 08:40 p/m
© Reuters.

Investing.com-- The S&P 500 closed lower Thursday, as rising Treasury yields on signs of sticky inflation dented rate-cut hopes offsetting an Nvidia-led charge higher in tech stocks.   

At 16:00 ET (20:00 GMT), Dow Jones Industrial Average fell 605 points, or 1.5%, while S&P 500 fell 0.7%, and the tech-heavy NASDAQ Composite fell 0.4%. 

Fresh signs of pick up in inflation cools rate cut bets

The S&P Global (NYSE:SPGI) Flash US PMI Composite Output Index rose sharply from 51.3 in April to 54.4 in May, with the report also highlighting that "the rate of inflation accelerating to register the second-largest monthly increase seen over the past eight months."

Fresh fears that a underlying strength in the economy could spark a revival inflation, cooled investor expectations for rate cuts just a day after the Fed's May meeting minutes showed members were concerned about stalling disinflation. 

Adding to fears about demand-led inflation, initial jobless claims fell more than expected in the week ended May 11.

Treasury yields jumped, with the yield on the rate-sensitive 2-year treasury rising 5.7 basis points to 4.94%, forcing traders to rein in their bullish bets on stocks. 

About 48% of traders expect a rate cut in September down from 51% a day earlier.

Atlanta Fed president Raphael Bostic said Thursday, however, that the last couple of inflation prints suggest inflation remains on track to return to the 2% target, albeit at a slow pace.

Nvidia's surge on positive Q1 boosts tech sector 

Tech shrugged off the broader market malaise as NVIDIA Corporation (NASDAQ:NVDA) jumped 9% to a record high after the chipmaker's first quarter earnings blew past estimates. The firm also offered up a stronger-than-expected revenue forecast for the current quarter, and announced a 10-for-one forward stock split. 

Some on Wall Street were keen to point out the Nvidia's customer base is broadening out beyond cloud service providers, likely diluting "the reliance on big US CSPs," UBS said.

Live Nation sinks on report of DOJ lawsuit 

There was more corporate news to digest, outside of Nvidia's earnings, with Live Nation Entertainment (NYSE:LYV) stock sinking 8% on a report that the Department of Justice was planning a lawsuit against the firm over allegedly monopolistic practices by its Ticketmaster unit, and that lawmakers were also seeking a separation of Ticketmaster from the firm. 

News Corp (NASDAQ:NWSA) was flat after the news giant signed a content sharing deal with OpenAI, granting the latter access to content from several of its biggest publications.

Boeing in China woes, warns on cash flow; ELF Beauty shines on earnings stage

Boeing Co (NYSE:BA) fell more than 7% after the aircraft maker warned investors that it cash flow could take a bigger hit than the $3.9B seen in Q1, making it unlikely that it would be able to turn a positive cash flow for the year. 

In Q1, the company said the is expected to the end the year with positive cash flow, but a series of production issues and the departure of its chief executive officer has weighed on performance. 

The company also said China had halted deliveries as the country's aviation regulator seeks additional certification documents. 

ELF Beauty Inc (NYSE:ELF), meanwhile, climbed 18% after the cosmetics maker reported fiscal fourth-quarter results that beat Wall Street estimates.

(Peter Nurse, Ambar Warrick contributed to this article.)

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