Stocks struggle after tech-led bounce; oil climbs
Stocks struggled to gain traction one day after a tech-led rally as Treasury 10-year yields remained above 4%. Oil climbed.
Commodity and financial shares led declines in the S&P 500. The megacap space was mixed, with Nvidia Corp. up and Tesla Inc. down. Juniper Networks Inc. jumped on news it’s in advanced talks to be sold to Hewlett Packard Enterprise Co.
A growing mismatch between aggressive pricing for U.S. interest rate cuts and resilient economic fundamentals reducing the need for such easing risks creating a “reverse Goldilocks” scenario for global markets, according Max Kettner at HSBC Holdings Plc. A pullback in easing bets could trigger a selloff in risky assets and more gains for the dollar in the coming months, he told Bloomberg Television.
“We’re likely seeing a ‘head fake’ in the market right now,” said Matt Maley at Miller Tabak + Co. “We just don’t know yet if last week’s decline was that ‘head fake’ or if yesterday’s bounce was it. Thankfully, the battle lines are very well drawn and we’ll know which situation was the ‘head fake’ once one of two lines is broken in a meaningful manner.”
Corporate highlights:
• Chief Executive Officer Dave Calhoun will call on Boeing Co. workers to focus on safety as the top priority at an all-hands meeting on Tuesday, as senior leaders stress the need for staff to work to a high standard following last week’s fuselage blowout on a 737 Max 9 aircraft.
• BlackRock Inc. will dismiss about 600 employees, or roughly 3% of its global workforce, as it seeks to reallocate resources amid rapid changes in asset management.
• Qualcomm Inc.’s push into automotive chips is on course to beat sales projections, Chief Executive Officer Cristiano Amon said, helping the company decrease its reliance on mobile-phone electronics.
• Microsoft Corp.’s $13 billion investment into OpenAI Inc. risks a full-blown investigation by European Union deals watchdogs, after a mutiny at the ChatGPT creator laid bare deep ties between the two companies.
• Match Group Inc., the owner of Tinder and other dating platforms, rose after a Wall Street Journal report said that Elliott Investment Management has built a stake of about $1 billion in the company.
• Spanish blood plasma firm Grifols SA tumbled after short seller Gotham City Research LLC published a report criticizing its financial reporting.