Wall Street hangs around its records after European stocks slump

Specialist James Denaro works at his post on the floor of the New York Stock Exchange on June 12, 2024. Global shares were mixed on Friday, June 14, 2024, after Wall Street touched fresh records, with benchmarks pushed higher by the frenzy over artificial intelligence technology. (AP Photo/Richard Drew, File)

NEW YORK — U.S. stocks hung around their record levels on Friday as Wall Street remained relatively quiet following another slide in Europe.

The S&P 500 edged down by less than 0.1 percent, marking the first time this week that it did not set an all-time high. The Dow Jones Industrial Average dipped 57 points, or 0.1 percent, while the Nasdaq composite added 0.1 percent to its record set a day before on the back of gains for technology stocks.

Losses were sharper across the Atlantic, where markets have been rocked by the results of recent elections in Europe. Wins by far-right parties have raised the pressure on France’s president in particular, and investors worry it could weaken the European Union, stall fiscal plans, and ultimately hurt France’s ability to pay its debt. Recent elections have also shaken markets in Mexico, India, and elsewhere.

France’s CAC 40 fell 2.7 percent to bring its loss for the week to 6.2 percent, its worst in more than two years. Germany’s DAX lost 1.4 percent.

On Wall Street, RH fell 17.1 percent after reporting a worse loss for the latest quarter than financial analysts expected. The seller of home furnishings called this “the most challenging housing market in three decades.”

High mortgage rates have hurt the housing market, as the Federal Reserve has kept its main interest rate at the highest level in more than two decades. The central bank is intentionally slowing the economy through high rates in hopes of starving high inflation of its fuel.

READ: Long-term mortgage rates in U.S. ease for third straight week

Cruise-ship operators were among the market’s biggest losers after analysts at Bank of America flagged softening price trends for trips. Norwegian Cruise Line dropped 7.5 percent for the worst loss in the S&P 500, and Carnival fell 7.1 percent.

Big tech stocks race ahead

Stocks have nevertheless set records as hopes rise that inflation is slowing enough to convince the Federal Reserve to cut interest rates later this year. Big technology stocks, meanwhile, continue to race ahead almost regardless of what the economy and interest rates are doing.

Adobe jumped 14.5 percent after reporting stronger profit for the latest quarter than analysts expected.

Broadcom rose 3.3 percent for a second straight day of gains after reporting better profit than expected and a 10-for-one stock split to make its price more affordable. Nvidia gained 1.8 percent as the poster child of the rush into artificial intelligence technology seeing its total market value climb even higher above $3 trillion.

Nvidia was the strongest single force pushing upward on the S&P 500, as has become almost routine recently. Adobe and Broadcom were close behind.

All told, the S&P 500 dipped 2.14 points to 5,431.60. The Dow lost 57.94 to 38,589.16, and the Nasdaq composite added 21.32 to 17,688.88.

In the bond market, U.S. Treasury yields ticked lower after a preliminary report from the University of Michigan suggested sentiment among U.S. consumers failed to improve this month, against economists’ expectations.

Solid spending by U.S. households has been one of the main engines keeping the economy out of a recession, but “assessments of personal finances dipped, due to modestly rising concerns over high prices as well as weakening incomes,” according to Joanne Hsu, director of the Surveys of Consumers.

READ: US inflation cooled in May in a sign that price pressures may be easing

Perhaps more importantly for financial markets, expectations for upcoming inflation among U.S. consumers don’t seem to be moving much, even if they are relatively high. That’s an encouraging signal that the economy could avoid a self-fulfilling cycle where expectations for higher inflation drive behavior that creates more of it.

The yield on the 10-year Treasury fell to 4.21 percent from 4.25 percent late Thursday. It had been as high as 4.60 percent late last month, before a couple of encouraging reports on inflation.

In stock markets abroad, indexes were mixed in Asia. Japan’s Nikkei 225 rose 0.2 percent after the country’s central bank held steady on interest rates.