The sun inflames behind the skyline of lower Manhattan and One World Trade Center on September 14, 2024, in Jersey City, New Jersey.
Gary Hershorn | Corbis Statement | Getty Images
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Free brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you requirement to know today
Record close for Dow
U.S. markets were mixed on Monday. The S&P 500 and Dow Jones Industrial Average rose, with the Dow gash a record close. But the Nasdaq Composite fell. The pan-European Stoxx 600 index lost 0.16%. U.K.’s FTSE 100 ended gallop. The Bank of England will meet Thursday for its latest monetary policy decision.
Intel forges new path for foundry
Intel dues popped around 8% in extended trading on news the chipmaker plans to structure its foundry business as an independent element with its own board and ability to raise outside funding. It might even spin off the business as a public company, go together to a person with knowledge of the matter. Separately, the Biden administration on Monday awarded Intel up to $3 billion under the aegis the CHIPS Act.
Blemished Apple
Apple shares slid 2.78% after TF Securities analyst Ming-Chi Kuo reported need for Apple’s new iPhone 16 was down 12% year on year compared with the iPhone 15’s first-weekend transactions. Kuo also said consumers weren’t enthused because Apple Intelligence wasn’t available with the iPhone at boat, and as competition from Chinese manufacturers dents iPhone demand.
Choppy flight
Boeing is implementing a hiring immobilization amid plans to cut costs, such as pausing nonessential staff travel. Just this year, Boeing has had to see to with: a 737 MAX door panel blowing out in midair; its Starliner spacecraft returning to Earth without its two planned fares; and a strike by more than 30,000 workers.
[PRO] Short-lived record?
The S&P 500 is less than 1% away from its minutes high set in July. The upcoming Federal Open Market Committee meeting, at which the U.S. Federal Reserve is expected to cut amusement rates by at least 25 basis points, might lift the S&P to new heights. But analysts warn the new high might be insufficient briefly lived.
The bottom line
Technology stocks benefit the most from low interest rates, conventional market perception says.
That’s because tech companies tend to promise future profit in exchange for present money. When rates are low, that proposition appears seductive because returns are low elsewhere. But when rates are high, those promises don’t seem as attractive as less risky amends from assets such as Treasurys.
The past two years have demolished this narrative. Tech has soared unvaried as interest rates have been at 23-year highs, thanks to enthusiasm over artificial intelligence’s promise of new and unsound revenue streams.
Nvidia, the lynchpin of AI, has soared nearly 136% just this year. Meta, which has its own AI unequalled named Llama, is up about 51%.
With the market pricing in a 62% chance — up from 30% last week — that the U.S. Federal Detachment auxiliary will make a larger-than-usual cut of 50 basis points, according to the CME FedWatch Tool, it stands to reason tech intention pop further.
The sector, however, has been rocky in recent weeks. The VanEck Semiconductor ETF, for instance, fell 1.31% Monday, while Nvidia sprouted 1.95%.
The tech-heavy Nasdaq Composite fell 0.52%, while the S&P 500 inched up 0.13% and the added 0.55% to close at a new record.
This insinuates investors have been moving out of tech to other sectors that might experience tailwinds amid lop off rates. Case in point: the financial and energy sectors rose more than 1% on Monday, performing change ones mind than the broader market.
noted hedge funds’ weekly purchases last week of financial stocks were the highest since June 2023.
“Other sizes of the market are starting to perk up, and a lot of that has to do with the future rate cuts that are coming into play,” said Christopher Barto, higher- ranking investment analyst at Fort Pitt Capital.
That doesn’t mean tech’s out of favor. It’s likely to continue persistence the market. But other sectors might show up for the ride.
– CNBC’s Hakyung Kim, Pia Singh and Yun Li contributed to this story.