In a bullish market session, the Dow Jones Industrial Average exhibited a strong performance, propelled by outstanding earnings from Salesforce (CRM), despite mixed results in other indices. Meanwhile, Elon Musk’s Cybertruck unveiling added to the excitement, but an analyst cautioned investors. Notably, other prominent stocks such as Nvidia (NVDA), Meta Platforms (META), and Microsoft (MSFT) experienced declines.
Positive Inflation Data and Economic Developments
Encouraging inflation data emerged, supporting the stance of interest rate doves. Headline inflation remained flat month-over-month, rising 3% annually, aligning with economists’ expectations. However, first-time unemployment claims exceeded expectations, while continuing claims reached their highest level since November 27, 2021. These metrics suggest a cooling off in both prices and the labor market, potentially influencing rate decisions.
Federal Reserve Chair Jerome Powell’s upcoming economic discussion in Atlanta leaves the market speculating on his stance amid fluctuating Treasury yields.
Treasury Yields Rise
Despite a positive day for the market, Treasury yields increased across various durations. The 10-year Treasury note rose by 6 basis points to 4.33%, and the 30-year gained 5 basis points to 4.5%. This upward movement was mirrored in the five-year and two-year yields.
Nasdaq Struggles, S&P 500 Gains
While the Nasdaq dipped marginally, growth stocks showed resilience, with the S&P 500 managing to reverse losses and close up by 0.4%. Notable stock performances included Phillips 66 (PSX), which surged by 5.5% on news of activist investor Elliott Investment Management acquiring a significant stake.
Most S&P 500 sectors closed higher, with health and industrials leading, while consumer discretionary and communication services lagged.
Dow Jones Today: Salesforce Leads Surge
The Dow Jones Industrial Average outperformed, gaining 520 points or 1.5%, largely attributed to Salesforce’s remarkable performance. Salesforce shares soared over 9.4% following an earnings beat and robust guidance. Surprisingly, Salesforce has outpaced Microsoft as the best Dow performer year-to-date, with an 87% lift and a presence on the IBD Leaderboard Watchlist.
Other notable Dow performers included UnitedHealth (UNH) and Boeing (BA), gaining 3.4% and 3.2%, respectively. However, Intel (INTC), Walmart (WMT), and Chevron (CVX) experienced lagging performance.
Tesla Stock Declines Amid Cybertruck Hype
Despite the buzz surrounding Tesla’s Cybertruck event, Tesla stock closed lower. Elon Musk hyped the event, showcasing the Cybertruck’s bulletproof capabilities and other features. Analysts, like Wedbush’s Dan Ives, were impressed, anticipating significant production volumes. However, Tesla stock finished the day down 1.7%.
Analyst Warns on Cybertruck Pricing
Investors and consumers eagerly awaited details on the Cybertruck’s pricing. Deepwater Asset Management’s Gene Munster cautioned that the vehicle’s high pricing might hinder mass adoption, suggesting that price adjustments may be necessary in the coming years.
Magnificent Seven: Nvidia Lags
Among the Magnificent Seven, Nvidia faced the most significant decline, falling 2.9%. The AI chip leader slipped below the 21-day exponential moving average and reversed below a buy zone. Other members, including Alphabet (GOOGL), Meta Platforms, Amazon.com (AMZN), and Microsoft, also faced varying degrees of decline, while Apple (AAPL) was the sole gainer.
Outside Dow Jones: Three Stocks Testing Entries
Despite signs of market rotation, the current uptrend encourages investors to monitor breakout opportunities. Stocks like Embraer, MongoDB, and Cheniere Energy are testing entries, showcasing positive performance and strong fundamentals.
