**Markets News, June 13, 2024: Tech Rally Propels S&P 500 to Fourth Straight Record**
The majority of U.S. stocks declined on Thursday, but a mega-cap tech rally lifted the Nasdaq and S&P 500 to their fourth consecutive record close after a string of softer-than-expected inflation reports. The Nasdaq Composite climbed 0.3%, while the S&P 500 advanced 0.2%. The Dow Jones Industrial Average declined for a third straight day, falling 0.2%.
Shares of Broadcom (AVGO) surged to a record after the chipmaker reported better-than-expected fiscal second-quarter revenue, fueled by demand for AI products. The rally extended to AI favorites Nvidia (NVDA) and Super Micro Computer (SMCI).
The producer price index took a surprising turn lower and fell 0.2% in May. Core PPI, excluding the volatile food and energy segments, was unchanged. Treasury yields fell following the softer-than-expected report, raising hopes that the Federal Reserve might cut the interest rate it tentatively forecast sooner than expected.
Tesla (TSLA) shares rose after CEO Elon Musk said late Wednesday that shareholders were set to approve his $55.8 billion pay package and the EV maker’s reincorporation in Texas at the company's annual shareholder meeting today.
U.S. stocks climbed yesterday, with the Nasdaq and S&P 500 hitting record highs after data showed inflation slowed in May and the Federal Reserve tentatively forecast cutting interest rates once before the end of the year. The Dow Jones Industrial Average, light on the tech stocks that led the session, slipped.
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**Stock Indexes Wrap: Broadcom, Nvidia Boost S&P 500 in Mixed Trading Day**
**The Dow**
Apple (AAPL) ticked up 0.6%, rising for the third straight day after unveiling artificial intelligence features coming to new operating systems later this year. Boeing (BA) slid 1.1% amid reports the jet maker was investigating manufacturing problems with some undelivered 787 Dreamliners.
**The S&P 500**
Broadcom (AVGO) shares soared 12.3% to close at a record high after the company reported soaring AI chip revenue in the most recent quarter and announced a 10-for-1 stock split. AI favorites Super Micro Computer (SMCI) and Nvidia (NVDA) soared amid the Broadcom-sparked optimism. Super Micro jumped 12.4% and Nvidia advanced 3.5%. Kimberly-Clark (KMB) gained 3.1% after Bank of America double-upgraded the stock, citing benefits from its reorganization efforts. Tesla (TSLA) gained 2.9% after Elon Musk said shareholders were overwhelmingly voting in favor of his $56 billion pay package and plans to reincorporate in Texas. Paramount Global (PARA) slid 6.9% as investors continued to digest controlling shareholder Shari Redstone’s decision on Tuesday to call off a merger with Skydance Media.
**The Nasdaq 100**
Semiconductor stocks followed Broadcom higher, with Micron (MU) up 1.7% and Qualcomm (QCOM) gaining 1.1%. Starbucks (SBUX) added 1.1% after the Supreme Court sided with the coffeehouse chain in a dispute over the firing of pro-union employees in 2022. Unprofitable software companies were among the index’s biggest laggards. MongoDB (MDB) fell 4.8%, Atlassian (TEAM) shed 4.2%, and ZScaler (ZS) declined 4.1%. Amazon (AMZN) and Alphabet (GOOGL) missed out on the day’s tech rally. They lost 1.6% and 1.5%, respectively. Meta (META) slid 0.8%.
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**MicroStrategy To Buy More Bitcoin, Plans to Raise $500 Million**
MicroStrategy (MSTR) is looking to add more bitcoin (BTC) to its stash and is raising $500 million in debt to facilitate the purchase, along with other corporate purposes, the company announced Thursday. As of April 26, the company owned 214,400 bitcoins that at today's prices, assuming no change in the size of the holding, would be valued at roughly $14 billion. Other companies have purchased bitcoin, but none to the extent that MicroStrategy has. Consequently, MicroStrategy's stock price is more closely correlated with bitcoin prices than any other bitcoin-investing company.
While the price-trend lines for bitcoin and MicroStrategy seem to move in tandem on the chart below, MicroStrategy stock has raced ahead of the cryptocurrency since February. Year-to-date, bitcoin prices have gone up roughly 50%, while MicroStrategy stock has more than doubled.
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**GameStop Shareholder Meeting Postponed Following Technical Difficulties**
GameStop’s (GME) annual shareholder meeting was reportedly postponed on Thursday after a crush of investors and spectators tuning into the livestream caused the servers hosting the event to crash. The event, which was scheduled to begin at 11 a.m. ET, was adjourned after nearly an hour of technical difficulties that prevented shareholders from attending the meeting virtually. The company said it would provide an update “as soon as possible” detailing when the meeting would reconvene. GameStop, a struggling video game retailer, has drawn outsized attention from Wall Street ever since “Roaring Kitty,” or Keith Gill, reemerged on X several weeks ago, reigniting the meme stock craze that he led in early 2021.
GameStop shares have soared and plummeted in weeks of volatile trading. During that time, GameStop has sold more than 100 million additional shares in two separate sales and unexpectedly reported grim first-quarter results. Gill last week hosted his first YouTube livestream since 2021, during which he revealed his GameStop position was worth more than $320 million at the time. Gill has continued to sporadically post memes on X since last week’s livestream, while GameStop’s price swings have moderated. Shares of GameStop were up nearly 13% Thursday afternoon. They have gained about 64% so far this year.
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**What Does Thursday's PPI Report Mean for the Fed?**
Prices paid at the wholesale level took a surprising turn lower in May, providing more evidence for Federal Reserve officials that price pressures continue to ease. Census Bureau data showed the Producer Price Index (PPI) for May dropped 0.2% when compared with April, less than the slight increase that economists had forecasted. PPI is of interest to the Federal Reserve because some of the categories flow into their preferred measure of inflation, the Personal Consumption Expenditures (PCE) price index.
“The surprise drop in wholesale prices helps support expectations that disinflation has begun to inch lower on a more sustained basis,” said Quincy Krosby, LPL Financial chief global strategist. The Federal Reserve will likely want to see a “couple more months” of declining inflation before moving to cut rates as many as two times this year, beginning in September, said Bernard Yaros, lead U.S. economist at Oxford Economics.
“We think this is likely, with residual seasonality behind us, the labor market in better balance, deflation in certain key goods prices, and housing inflation potentially due to switch to a lower gear,” he said. Thursday's report was welcome news in bond markets. Treasury yields, which move inversely to bond prices, retreated for a second consecutive day, reflecting expectations that interest rates and inflation will be lower in the future. The benchmark 10-year yield fell below 4.25% for the first time since March.
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**Stocks Making the Biggest Moves Midday**
**Gains:**
Tesla (TSLA): Shares rose 4% after CEO Elon Musk said late Wednesday that shareholders are set to approve his $55.8 billion pay package and the EV maker’s reincorporation in Texas at the company's annual shareholder meeting today. Broadcom (AVGO): Shares surged more than 14% after the chipmaker reported better-than-expected fiscal second-quarter revenue, fueled by AI product sales. It also announced a 10-for-one stock split as Wall Street darling Nvidia (NVDA) did recently. Nvidia shares rose 3%.
**Losses:**
Dave & Buster’s Entertainment (PLAY): Shares tumbled more than 11% after the game-themed restaurant chain’s first-quarter results undershot analysts' forecasts. MicroStrategy (MSTR): Shares in the software company, which has morphed into one of the world’s largest corporate holders of bitcoin, fell 6% after the company said it plans to sell $500 million in convertible bonds in a private placement, with proceeds going toward buying more of the token.
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**Dave & Buster’s Stock Drops as Earnings Miss Estimates Amid Soft Consumer Demand**
Dave & Buster’s Entertainment (PLAY) shares slumped after the restaurant and entertainment chain posted quarterly results that fell short of expectations amid challenging economic conditions weighing on consumer demand. For the quarter ending May 5, the company reported diluted earnings of 99 cents per share, significantly below the $1.73-a-share figure expected by analysts. Revenue in the period of $588.1 million fell 1.5% from a year earlier and came in below the consensus forecast of $616 million. Moreover, same-store sales declined 5.6% from last year’s equivalent quarter, a steeper fall than the 3.8% Street estimate.
**Tesla Stock Gains as Musk Says His $56B Pay Deal Will Be Approved**
Tesla (TSLA) shares gained Thursday after Chief Executive
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