Nvidia Shines as S&P 500 and Nasdaq Tiptoe to Record Highs Amid Fed Anticipation
The S&P 500 and Nasdaq tiptoed to record closing highs on Monday, as investors braced themselves for this week’s consumer prices report and a Federal Reserve policy announcement.
Nvidia (NASDAQ) added a bit of sparkle to the Nasdaq and S&P 500, closing up 0.7% after a 10-for-one stock split. Whispers are now circulating that the chip wizard might get a VIP invite to the blue-chip Dow.
The eagerly awaited Consumer Price Index report for May drops Wednesday, coinciding with the grand finale of the Fed’s two-day policy powwow.
The central bank is expected to play it cool on interest rates, but investors are on the lookout for any hints about when the Fed might start slicing rates.
“This week is a market page-turner with key comments and signals from the Federal Reserve,” said Quincy Krosby, chief global strategist at LPL Financial (NASDAQ) in Charlotte, North Carolina.
The Dow Jones Industrial Average climbed 69.05 points, or 0.18%, to 38,868.04, the S&P 500 edged up 13.8 points, or 0.26%, to 5,360.79, and the Nasdaq Composite advanced 59.40 points, or 0.35%, to 17,192.53.
Following Friday’s strong jobs report, traders pared back their bets on September rate cuts, with odds now sitting at 50%.
“It’s going to be a muted affair as folks hedge their bets ahead of Wednesday,” said Alex McGrath, private wealth advisor at NorthEnd Private Wealth.
Apple shares (NASDAQ) dipped 1.9% on day one of the iPhone maker’s annual developer conference, as investors anxiously await updates on its AI integration.
Among the day’s winners, Southwest Airlines (NYSE) soared 7% after activist investor Elliott Investment Management revealed a $1.9 billion stake in the company.
Diamond Offshore Drilling (OTC) shares jumped 10.9% following a $1.59 billion buyout deal by oilfield services company Noble, whose shares rose 6.1%.
On the NYSE, advancing issues outpaced decliners by a 1.06-to-1 ratio, while on the Nasdaq, a 1.01-to-1 ratio favored advancers.
The S&P 500 posted 19 new 52-week highs and 5 new lows; the Nasdaq Composite recorded 56 new highs and 177 new lows.
Volume on U.S. exchanges was 10.39 billion shares, compared to the 12.80 billion average for the last 20 trading days.
Apollo Global and Kyndryl Mull Joint Bid for DXC Technology, Sparking Stock Surge
Buyout firm Apollo Global and Kyndryl Holdings, the IT services spin-off from IBM (NYSE), are reportedly scheming a joint bid for DXC Technology (NYSE), insiders revealed on Monday.
Word on the street is that Apollo and Kyndryl are cooking up an offer between $22 and $25 per share for DXC. The rumor mill sent DXC shares soaring 11% to close at $18.45, pushing the company’s market cap to $3.3 billion.
Meanwhile, DXC, another IT services player, is also fishing for buyers for its insurance software arm, aiming for over $2 billion, but might just stay solo under its new CEO, Raul Fernandez, appointed in February, according to the sources.
Preferring to remain incognito due to the hush-hush nature of the deal, the sources added that neither DXC nor Apollo had any comments, while Kyndryl remained silent.
DXC’s menu includes analytics, engineering, cyber security, cloud infrastructure, and outsourcing to help companies manage their operations. However, the company’s revenue has taken a nosedive over the past year, thanks to high interest rates and economic slowdown fears, prompting their clients to tighten their belts. Consequently, DXC shares have lost over a third of their value in the last 12 months.
In response, DXC has been trimming the fat with cost cuts and restructuring. The Ashburn, Virginia-based company previously flirted with a sale last year but called it off when a private equity suitor couldn’t muster the funds.
Kyndryl, focusing on infrastructure IT services, boasts a market value of $6 billion, while Apollo, managing a hefty $671 billion in assets, is one of the titans in private equity and corporate credit investments.
Smart investing is like planning a dinner party with stocks and bonds as your guests: you want a diverse mix to keep things lively, avoid too much of anything that might spoil the mood, and have a backup plan for when the market spills wine on your new rug. With a sprinkle of patience, a dash of research, and a keen eye on long-term goals, you can turn your financial soirée into a celebration of steady growth and tasty returns. Just remember, while a good investor listens to their gut, a great one knows when to check the recipe.