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Markets News, June 14, 2024: Tech Boosts Nasdaq to Fifth Straight Record; Dow Lags Behind



*Markets News, June 14, 2024: Tech Lifts Nasdaq to Fifth Straight Record; Dow Lags**


**By NISHA GOPALAN and COLIN LAIDLEY**


**Updated June 14, 2024**


Tech stocks propelled the Nasdaq to its fifth consecutive record close on Friday, despite most U.S. stocks falling at the end of a week filled with inflation updates and Fed rate forecasts. 


The Nasdaq Composite increased by 0.1% on Friday, finishing the week up by 3.2%. The S&P 500 rose 1.6% for the week, despite a slight drop of less than 0.1% on Friday. The Dow Jones Industrial Average, however, decreased by 0.2%, ending the week 0.5% lower.


Adobe (ADBE) shares surged due to a strong outlook for its generative artificial intelligence (AI) digital media products, which drove higher-than-expected results and boosted its earnings and sales forecasts.


Tesla (TSLA) shares fell after its shareholders reapproved Elon Musk's $56 billion compensation package on Thursday.


Treasury yields declined for a third day, with the 10-year yield reaching a three-month low. While Federal Reserve officials projected just one interest rate cut this year, market participants were optimistic that cooling inflation signs could prompt the central bank to cut rates as early as September.


Most U.S. stocks declined yesterday, but a rally in mega-cap tech stocks lifted the Nasdaq Composite and S&P 500 to new record closes following a series of softer-than-expected inflation reports. The Dow Jones Industrial Average declined for the third consecutive day yesterday.


**Why Investors Are Closely Watching Apple and Nvidia Friday**


All eyes were on Apple (AAPL) and Nvidia (NVDA) on Friday as the two companies competed to be America's second-most valuable company by float-adjusted market capitalization.


Why is this significant? The $70 billion Technology Select Sector SPDR Fund (XLK) will be rebalanced next week based on Friday's market close. Due to specific diversification rules, individual stock weights in the index are capped at 23%, and the total weight of stocks exceeding 5% can't surpass 50%.


This is why Apple, Microsoft, and Nvidia—all worth more than $3 trillion—have different weights in the index. Apple and Microsoft each account for about 22% of the index, while Nvidia makes up just 6%. If Nvidia's float-adjusted market cap surpasses Apple's, its index weight will jump above 20% next Friday, while Apple's will drop below 5%.


With less than half an hour left in the session, the companies were close. Apple shares were down 0.8% and Nvidia shares were up 1.8%, giving Nvidia a slight edge.


**Arm Holdings To Join the Nasdaq-100 Index**


Arm Holdings (ARM) could see a boost after the Nasdaq announced that the British semiconductor and software design company would be added to the Nasdaq-100 Index. The change will take effect before trading on Monday, June 24, with Arm replacing satellite programming provider Sirius XM Holdings (SIRI).


This decision comes nine months after Arm first began trading following the largest initial public offering (IPO) in the U.S. since 2021. Although Arm Holdings' American depositary receipts (ADRs) initially rose as much as 6% on Friday, they reversed course to end 2% lower by the afternoon. Despite this, they have surged more than 100% this year.


**RH Posts Bigger-Than-Expected Loss as Tough Housing Market Hurts Demand**


Shares of RH (RH) fell on Friday after the upscale home furnishings retailer reported a larger-than-expected loss and issued soft guidance due to the tight housing market. The company, formerly known as Restoration Hardware, reported an adjusted first-quarter loss of $0.40 per share, wider than estimates. Revenue fell 1.7% year-over-year to $727.0 million, although this beat expectations.


CEO Gary Friedman noted that the company is facing “the most challenging housing market in three decades,” and expects "business conditions to remain challenging until interest rates ease and the housing market begins to rebound." RH predicted current-quarter sales growth of 3% to 4%, falling short of forecasts, but reiterated its full-year revenue growth outlook of 8% to 10%.


**Stellantis To Shift Some EV Production on China Tariff Concerns**


Stellantis (STLA) shares declined on Friday after the automaker announced it would move some electric vehicle (EV) production from China to Europe due to potential tariffs on Chinese-made EV imports by European regulators. 


CEO Carlos Tavares explained that Stellantis altered its EV production plans with Chinese joint-venture partner Leapmotor in response to the anticipated higher duties. The European Commission warned on Wednesday that new tariffs on Chinese-made EVs, potentially as high as 38.1%, would begin on July 4 unless talks with Beijing addressed concerns over China's EV subsidies providing an advantage over EU carmakers.


Shares of Stellantis fell by 5% and reached their lowest level this year, down 14%.

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