S&P 500, Nasdaq 100 Dip From Record Highs As Investors Take Chipmaker Profits; Energy Sector Rebounds, Yields Rise: What's Driving Markets Thursday?

After the Juneteenth holiday break, Wall Street reopened with a cautious tone, as the S&P 500 and Nasdaq 100 indices declined after hitting all-time highs around midday trading in New York. This decline was driven by profit-taking in chipmaker stocks and rising Treasury yields, which dampened risk sentiment.

The iShares Semiconductor ETF SOXX fell by 2.4%, marking its worst session since May 1, after reaching technically “overbought” levels earlier in the week.

Oil prices surged above $81 a barrel, aiming for the highest close since late April. This was spurred by larger-than-expected drops in U.S. inventories last week, fueling a rally in oil-related companies.

Small caps also softened, whereas blue chips saw a rebound, with the Dow Jones Industrial Average outperforming other major indices with a 0.4% gain.

Long-dated Treasury yields rose, with the 10-year yield up by 5 basis points to 4.27%, following mixed economic data released earlier in the day. Jobless claims slightly increased more than expected last week, and a manufacturing activity gauge in the Philadelphia region fell short of estimates, reaching its lowest level in five months.

Additionally, housing data showed sharp declines in both housing starts and building permits, reigniting concerns about a tight real estate market.

Bonds fell, with the iShares 20+ Year Treasury Bond ETF TLT down 0.9%. The U.S. dollar index (DXY) rose 0.4%, with the greenback gaining ground against all major currencies.

The Bank of England kept its key policy rate unchanged at 5.25%, as expected, while the Swiss National Bank cut rates by 0.25 percentage points to 1.25%. Consequently, the British pound and the Swiss franc fell by 0.5% and 0.8%, respectively, against the dollar.

Gold, tracked by the SPDR Gold Trust GLD, rose by 1.1%, while Bitcoin BTC/USD remained flat below $65,000.

Monday’s Performance In Major US Indices, ETFs

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust SPY was 0.3% lower to $547.24.
• The SPDR Dow Jones Industrial Average DIA was 0.4% higher to $390.90.
• The tech-heavy Invesco QQQ Trust (ARCA: QQQ) was 0.6% lower to $482.43.
• Sector-wise, the Energy Select Sector SPDR Fund XLE outperformed, up by 1.8%, while the Technology Select Sector SPDR Fund XLK lagged, falling 0.9%.

Thursday’s Stock Movers

• The world’s biggest company Nvidia Corp. witnessed a 2% decline, while Qualcomm Inc. QCOM, Micron Technology Inc. MU and Wolfspeed Inc. WOLF all tumbled by over 5%.
• Advanced Micro Devices Inc. AMD surged nearly 4%, outperforming all other chipmakers. This rise followed the announcement that Sun Singapore Systems, the largest parking solutions provider in Singapore, has selected AMD to power its AI-based parking management platform.
• Solar-related stocks experienced sharp declines after JPMorgan reduced price targets on Enphase Energy Inc. ENPH from $128 to $124 and on SolarEdge Technologies Inc. SEDG from $73 to $59.
• Gilead Sciences Inc. GILD soared over 8% after the company announced that a twice-yearly antiviral injection had successfully prevented HIV in all test subjects during a trial involving thousands of women and girls in South Africa and Uganda.
• Accenture plc ACN rose over 6%, despite missing both revenue and earnings estimate last quarter.
• Other stocks reacting to company earnings were The Kroger Company KR, down 2.8%, Darden Restaurants Inc. DRI, down 1.5%, Jabil Inc. JBL, down 8.7% and Commercial Metals Company CMC, up 5%.

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Illustration created using artificial intelligence via MidJourney.