U.S. Stocks Slip as Investors Take Profits in the Second Half of 2024
On Wednesday, U.S. stocks edged marginally lower as investors took profits after enjoying strong gains in the first half of 2024.
At 09:40 ET (13:40 GMT), the Dow Jones Industrial Average was down 125 points, or 0.3%, the S&P 500 dropped 12 points, or 0.2%, and the NASDAQ Composite slipped 13 points, or 0.1%.
Nvidia Rebound Supports Wall Street
The Nasdaq Composite and the S&P 500 have seen double-digit percentage gains so far this year, driven by strong performance in the tech sector. Nvidia (NASDAQ: NVDA), a key player in artificial intelligence, rose just under 1% early in the session, adding to Tuesday’s 7% gain after three days of steep losses. Nvidia’s stock remains over 150% higher this year due to high demand for AI-related products.
However, the Dow Jones Industrial Average (DJIA), more sensitive to economic fluctuations, has gained less than 4% in the first six months as investors remain cautious about elevated interest rates and their impact on economic growth in the latter half of the year.
Focus on Economic Data
The main economic data release this week is the monthly PCE price index, due on Friday. This is the Federal Reserve’s preferred inflation gauge. With the Fed projecting only one interest rate cut in December, investors are keen to see if the data indicates a moderation in price pressures.
Corporate Sector Highlights
FedEx (NYSE: FDX) stock surged 11% after the delivery and logistics giant projected full-year revenue growth in the low- to mid-single digits, surpassing analysts’ expectations of a 3% increase. The company also announced a $2.5 billion share buyback plan for the current financial year.
Rivian Automotive (NASDAQ: RIVN) jumped over 30% following a joint venture with Volkswagen (ETR: VOWG), which includes a $1 billion initial investment from the German automaker in the electric vehicle maker.
Conversely, General Mills (NYSE: GIS) stock fell 6% after the company forecast annual profit below estimates and reported a larger-than-expected drop in quarterly sales due to lower demand for snack bars and pet food, coupled with higher input costs.
Southwest Airlines (NYSE: LUV) stock dropped 4% after the airline lowered its second-quarter revenue forecast, citing uneven travel demand.
Oil Prices Fluctuate Amid Inventory Data
Crude prices slipped lower on Wednesday, giving back early gains ahead of the release of the official weekly U.S. crude stockpiles. By 09:40 ET, U.S. crude futures (WTI) were 0.2% lower at $80.71 per barrel, while the Brent contract fell 0.1% to $84.10 a barrel.
The American Petroleum Institute reported that U.S. oil inventories grew by approximately 0.9 million barrels in the week ending June 21, contrary to expectations for a draw of 3 million barrels. Despite this surprise, investors are largely anticipating inventory drawdowns during the peak third-quarter demand season. Official numbers from the Energy Information Administration are due later in the session.
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