Wall Street rises to more records as big tech stocks keep climbing

Trader William Lovesick, right works on the floor of the New York Stock Exchange, June 12, 2024.  (AP Photo/Richard Drew, File)

NEW YORK  — U.S. stocks rose to records Monday as gains for technology companies keep pushing the market higher.

The S&P 500 climbed 0.8 percent to top its all-time high set on Thursday. The Dow Jones Industrial Average gained 188 points, or 0.5 percent, while the Nasdaq composite added 1 percent to its own record.

Autodesk jumped 6.5 percent for one of the market’s biggest gains after an investment firm said it would try to delay the software company’s annual meeting so it could nominate new directors for the board.

Starboard Value also outlined how it says Autodesk hasn’t performed as well financially as it should have. In response, Autodesk said it would review Starboard’s suggestions but added that it has “a clear strategy that is working.”

Close behind Autodesk was chip company Broadcom, which rose 5.4 percent to add to gains from last week after it reported better profit than expected and said it would undergo a 10-for-one stock split to make its price more affordable.

Broadcom followed Nvidia, the company that’s become the poster child of Wall Street’s frenzy around artificial intelligence technology and just executed a similar split.

Broadcom was one of the strongest forces pushing the S&P 500 upward, along with a 2 percent rise for Apple and a 1.2 percent climb for Microsoft.

‘Glass half full outlook’

Continued momentum for Big Tech stocks, along with easing inflation pressure, has investors “cheering the ‘glass half full’ outlook” instead of focusing on the struggles of lower- and middle-income Americans and other challenges, according to Anthony Saglimbene, chief market strategist at Ameriprise.

READ: Views on US economy ‘more pessimistic’ as uncertainty grows: Fed

Super Micro Computer, which sells server and storage systems used in artificial intelligence and other computing, leaped 5.1 percent to bring its gain for the year so far to a staggering 212.2 percent. It’s also part of the supernova around AI that’s been overshadowing almost everything else on Wall Street.

The gains for tech helped offset pressure on the stock market caused by rising Treasury yields in the bond market. The climb in yields erased some of the slack created last week when better-than-expected reports on inflation raised hopes that the Federal Reserve will cut interest rates later this year.

This upcoming week has few top-tier economic reports for the United States, outside of Tuesday’s update on how much customers are spending at U.S. retailers and Friday’s preliminary look at the state of U.S. business activity. Markets will also be closed on Wednesday for the Juneteenth holiday.

READ: Consumers pushing back against price increases — and winning

A report on Monday said manufacturing in New York state is still contracting, though not by as much as economists expected. Manufacturing has been one of the areas hardest hit by the Federal Reserve’s zeal to keep its main interest rate at the highest level in more than two decades.

The Fed is trying to hold rates high for long enough to slow the economy and snuff out high inflation, but it wants to cut rates and reverse the momentum before the slowdown evolves into a painful recession.

Utilities, GameStop down

High interest rates hurt all kinds of investments and hit some areas particularly hard.

Utilities in the S&P 500 fell 1.1 percent for Monday’s largest loss among the 11 sectors that make up the index. They often get hurt when bonds are paying more in interest and drawing away income-seeking investors who would otherwise gravitate to dividend-paying utility stocks.

GameStop was another laggard and fell 12.1 percent following its annual shareholder meeting. The stock has been soaring and sinking as it rides waves of enthusiasm from smaller-pocketed investors. At the meeting, CEO Ryan Cohen said the struggling video game retailer will focus on cutting costs, which would involve a “smaller network of stores.”

All told, the S&P 500 rose 41.63 points to 5,473.23. The Dow gained 188.94 to 38,778.10, and the Nasdaq composite jumped 168.14 to 17,857.02.

In the bond market, the yield on the 10-year Treasury climbed to 4.28 percent from 4.22 percent late Friday. The two-year Treasury yield, which more closely tracks expectations for the Fed, rose to 4.76 percent from 4.71 percent.

READ: Asian stocks struggle after tepid Wall St lead, euro dips further

In stock markets abroad, European indexes calmed somewhat following last week’s rout. France’s CAC 40 rose 0.9 percent following its worst week in two years on worries that potential electoral losses by the president’s centrist party could lead to sharply higher debt for the country.

The modest gains for Europe followed losses in Asia. Japan’s Nikkei 225 dropped 1.8 percent.