MARKET SNAPSHOT
U.S. stocks ended mixed as Nvidia again lifted the technology sector, while the blue chip index underperformed. Treasury yields fell as markets braced for key U.S. labor data on Friday and an expected interest-rate hold by the Federal Reserve next week. Oil prices dropped after the OPEC+ decision to extend production cuts included the prospect of increased output later this year. Gold prices climbed as the dollar weakened.
MARKET WRAPS
EQUITIES
The S&P 500 eked out a gain, opening June on a subdued note.
The S&P 500 rose 0.1%, after a late rally pushed the index into the green. The Nasdaq Composite edged up 0.6%, snapping a three-session losing streak. The Dow Jones Industrial Average fell 0.3%. The choppy performance comes after widespread gains in May, when all three major indexes rose by at least 2.3%.
Trading has been more volatile in recent days, and fresh data pointed to a slowing U.S. economy: The Institute for Supply Management said its manufacturing index contracted more sharply in May than economists had forecast.
"There's starting to be some indications of weakness in the data that might make people nervous," said Kathryn Kaminski, chief research strategist and portfolio manager at AlphaSimplex.
Earlier Monday, Chinese shares ended mixed as investors digested PMI data. The Caixin Manufacturing PMI data indicated factory activity expanded in May, which was in contrast to the official gauge's indication that the sector was contracting.
The benchmark Shanghai Composite Index finished down 0.3% and the Shenzhen Composite Index lost 0.6%, while the ChiNext Price Index gained 0.8%. Hong Kong's Hang Seng Index closed 1.8% higher, led by EV stocks.
Japan's Nikkei Stock Average rose 1.1%, led by gains in financial and electronics stocks, as concerns eased about U.S. inflation and borrowing costs.
Australia's S&P/ASX 200 added 0.8%, building on its recent momentum amid strength in shares of banks.
Markets in New Zealand were closed for the King's Birthday holiday.
COMMODITIES
Oil futures fell sharply to mark their lowest settlement since February, following a decision by OPEC+ to extend cuts by the group into 2025 but to begin unwinding some additional voluntary reductions later this year.
West Texas Intermediate crude for July delivery fell 3.6% to settle at $74.22 a barrel on the New York Mercantile Exchange. August Brent crude declined 3.4% to $78.36 a barrel on ICE Futures Europe, the lowest finish since Feb. 5.
The meeting of the Organization of the Petroleum Exporting Countries and its allies "yielded a clear roadmap for the market, and it clarified the production strategy for the cartel," said Peter McNally, global head of sector analysts at Third Bridge.
"However, it has been almost two years since the world needed more of OPEC's oil, and the group may have to wait a little while longer to add barrels back to the market," he said.
Front month Comex gold for June delivery gained 1% to settle at $2346.60 per troy ounce.
"The resilience of gold prices above $2,300/oz has kept investor positioning in the Comex gold futures contract strong," said JPMorgan.
TODAY'S TOP HEADLINES
'The manufacturing side of the economy appears to have stalled,' ISM says
The numbers: A key barometer of U.S. factories fell to a three-month low as new orders waned and businesses were reluctant to invest due to high interest rates.
"The manufacturing side of the economy appears to have stalled," said Timothy Fiore, chairman of the Institute for Supply Management's manufacturing index.
The index fell to 48.7% in May from 49.2% in the prior month. Numbers below 50% signal that the manufacturing sector is contracting.
Mexico Ruling Party's Election Sweep Spooks Markets
MEXICO CITY-The wide margin of victory by Mexico's ruling party sparked concerns Monday that the nationalist movement now has the power to push through constitutional changes that opponents say risk weakening the country's democracy while raising the role of the state in the economy.
The Mexican peso slid more than 4% on Monday to 17.72 against the dollar, its weakest level since November. The currency is one of the most widely traded in emerging markets and acts as a barometer of how investors view the country's economic health. The stock market's benchmark IPC index fell 6%, its biggest percentage drop since March 2020, the outset of the coronavirus pandemic.
E*Trade Considers Kicking Meme-Stock Leader Keith Gill Off Platform
E*Trade is considering telling meme-stock leader Keith Gill he can no longer use its platform after growing concerned about potential stock manipulation around his recent purchases of GameStop options, according to people familiar with the matter.
Shortly before Gill reignited a meme-stock craze in May, he bought a large volume of GameStop options on E*Trade, the people said. This past weekend, Gill posted a screenshot of an E*Trade account showing he owns stock worth $115.7 million and a new set of options that expire later this month. His total gains on the position were at $6.86 million.
The stock of GameStop surged again on his posts, showing the power Gill, also known as Roaring Kitty and DeepF-Value, has as an influencer. GameStop shares rose 31% on Monday and are now up more than 70% since he reappeared.
Spotify Shares Jump on Price Hikes
Spotify Technology is testing the loyalty of its customer base by raising prices for the second time this year as it aims to become more consistently profitable, sending shares higher in early trading.
The most popular music streamer by subscriber count said Monday that starting in July, Spotify Premium members will have to pay a dollar more for their individual subscriptions at $11.99 a month. Duo plans that allow for two users to share an account will start costing $16.99 a month instead of $14.99 a month, while family plans will cost $3 more at $19.99 a month.
Spotify is raising prices as it struggles to post consistent profits despite its leading position in the audiostreaming business. The company, which is adding millions of new subscribers, promised investors it would more predictably make money from audio streaming despite a large percentage of its earnings going to labels and other right-holders. The latest increase is expected to help cover the cost of its push into audiobooks.
Tesla recalls more than 125,000 EVs, will issue an over-the-air software update
Tesla Inc. has issued a voluntary recall of more than 125,000 of its electric vehicles because of a warning light and chime that may not activate when a seat belt isn't being used. Therefore the vehicles don't comply with federal crash protection safety standards.
The EV giant said it was not aware of any collisions, injuries or fatalities related to the faulty seat-belt warning systems.
Tesla's stock TSLA edged up 0.1% in premarket trading.
Expected Major Events for Tuesday
00:30/THA: May Thailand Manufacturing PMI
00:30/MAL: May Malaysia Manufacturing PMI
01:30/AUS: 1Q Business Indicators
01:30/AUS: 1Q Balance of Payments
01:30/AUS: 1Q International Investment Position
21:00/SKA: May International Reserves
22:45/NZ: 1Q International Trade - Overseas Trade Indexes (Volumes / Prices)
23:00/SKA: 1Q Revised GDP / Preliminary Gross National Income
23:00/AUS: May Australia Services PMI
23:00/AUS: May Australian PMI
23:00/AUS: May Australian PCI
23:30/JPN: Apr Provisional Labour Survey - Earnings, Employment & Hours Worked
All times in GMT. Powered by Onclusive and Dow Jones.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
June 03, 2024 16:55 ET (20:55 GMT)
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