✅ Written by Austin DeNoce, Markets Reporter, Walk-On Holdings

✅ Edited by Casimir Stone, Creative Director Walk-On Holdings

This Week in US Markets: Inflation Insights and Tech Rebounds

This week in U.S. markets, the Nasdaq Composite and the S&P 500 briefly hit fresh record highs and closed slightly higher, while the Dow pulled back slightly to close out the week and quarter.

The Fed’s preferred inflation metric – Core PCE – showed prices in May increased as expected at 0.1% from April and 2.6% annually, building more confidence around the Fed’s long-awaited rate cut coming sooner rather than later. The PCE inflation report also showed personal income increasing more than expected at 0.5% while personal spending fell short of expectations, rising just 0.2%. 

In other economic news for the week, Fed Governor Michelle Bowman said she is open to raising rates again if inflation doesn’t come down, though Friday’s data did little to reinforce that possibility. Elsewhere, unemployment claims saw a modest decline but still registered the third-highest level of 2024. Consumer confidence also saw a slight dip in June. Although the assessment of current conditions improved, future expectations fell, marking the fifth straight month below 80, which usually signals a near-term recession. 

On the housing front, the Case-Shiller Home price index showed overall housing prices increased by 1.2% to a record high in April. Sales of new single-family homes fell 11.3% in May while pending home sales fell 2.1% from April and 6.6% annually. The 30-year mortgage rate also slightly declined to 6.93%, its lowest level in more than three months.

In company news, chipmakers were under pressure to start the week, with Nvidia, Broadcom, and Qualcomm continuing their downtrend from the previous week. Still, they ended the week strong, erasing all or most of their losses. Fellow chipmaker Micron also reported earnings that beat estimates, but its stock fell after sharing a revenue forecast for the current quarter that failed to impress investors. 

However, things weren’t all bad in tech. The software sector gathered momentum toward the end of the week as names like Adobe, Salesforce, and Palo Alto Networks all jumped higher. Alphabet and Amazon’s stocks also cemented new record highs, with the latter pushing its market capitalization above $2 trillion for the first time.

In the retail sector, Levi Strauss saw its stock slide double digits after missing sales estimates and issuing a warning of a “generally cautious” consumer. Shares of Walgreens plummeted after falling short of earnings estimates and cutting its profit forecast due to consumer resistance to high prices. The retailer also announced plans to close stores. Finally, Nike followed suit with its shares cratering after it slashed its outlook, citing a wobbling consumer, particularly in China.

In healthcare, medical device companies ResMed and Inspire Medical Systems saw their shares tumble after Eli Lilly reported trial results that showed its weight loss drug improved obstructive sleep apnea. Eli Lilly also announced a partnership with OpenAI to create medicine to treat drug-resistant pathogens. Meanwhile, Hunterbrook Media published a report alleging the health services company Hims & Hers sells knockoff GLP-1 weight loss drugs, which sent the company’s stock sharply lower. Finally, Moderna shares tumbled after the company reported its RSV shot was only 50% effective at preventing RSV after 18 months.

In the social media sector, the dating app Grindr forecasted 20% to 25% revenue growth through 2027, while Truth Social-owner Trump Media said it anticipates proceeds of more than $69 million from last week’s exercised warrants. 

In other company news, Airbus cut its 2024 earnings forecast to 5.5 billion euros, a decline of 1 billion euros compared to previous forecasts. It also cut its aircraft delivery targets for the year by 30 to 770. On the brighter side, FedEx topped earnings and revenue estimates while announcing it was on track to achieve its $4 billion cost-cutting goal by 2025. In the auto sector, Volkswagen announced it would invest as much as $5 billion into EV-maker Rivian.