The sun rises behind the skyline of Lower Manhattan and One World Trade Center on September 14, 2024 in Jersey City, New Jersey.
Gary Hershorn | Corbes News | Getty Images
This report comes from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open keeps investors updated on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Dow Jones closes at record high
The US market is Mix on Monday. this S&P 500 Index and Dow Jones Industrial Average rose, with the Dow closing at a record high. but Nasdaq Index fell down. The pan-European Stoxx 600 index fell 0.16%. Britain’s FTSE 100 ended flat. The Bank of England will meet on Thursday to make its latest monetary policy decision.
Intel opens up new path for foundry
Intel Shares rose about 8% in after-hours trading on news that the chipmaker plans to build its foundry business into an independent unit with its own board of directors and the ability to raise external funds. It may even spin off the business into a public company, according to people familiar with the matter. Separately, the Biden administration on Monday awarded Intel up to $3 billion in funding under the CHIPS Act.
defective apple
apple The stock price fell 2.78% after Tianfeng Securities analyst Guo Mingchi reported Compared with iPhone 15’s first weekend sales, demand for Apple’s new iPhone 16 dropped 12% from the same period last year. Kuo also said consumers were not keen because Apple Intelligence was not available when the iPhone was launched and competition from Chinese manufacturers weakened demand for the iPhone.
bumpy flight
boeing company A hiring freeze is being implemented and there are plans to cut costs, such as suspending non-essential employee travel. Just this year, Boeing has had to contend with: a 737 MAX door panel exploding in mid-air; its Starliner spacecraft returning to Earth without its two planned passengers; and a strike by more than 30,000 workers.
(PRO) A brief record?
The S&P 500 is less than 1% away from its all-time high set in July. The upcoming Federal Open Market Committee meeting is expected to cut interest rates by at least 25 basis points, which could push the S&P to new heights. But analysts warned the new highs could be short-lived.
bottom line
Conventional market wisdom holds that technology stocks benefit the most from low interest rates.
That’s because tech companies tend to promise future profits in exchange for existing funding. When interest rates are low, the proposition seems attractive because returns are lower elsewhere. But when interest rates are higher, those promises don’t seem as attractive as the returns on less risky assets like U.S. Treasuries.
The past two years have disproven that narrative. Despite interest rates at 23-year highs, technology stocks are soaring on enthusiasm for the explosive new revenue streams promised by artificial intelligence.
Nvidia, the leader in artificial intelligence, has soared nearly 136% this year alone. Meta, has its own The AI model called Llama rose about 51%.
According to market forecasts, the probability that the Federal Reserve will cut interest rates by 50 basis points is 62% (up from 30% last week). CME Group Fed Watch Toolit stands to reason that technology will become more popular.
However, the industry has been unstable in recent weeks. this VanEck Semiconductor ETFFor example, it fell 1.31% on Monday, while NVIDIA down 1.95%.
High-tech Nasdaq Index fell 0.52%, while S&P 500 Index A slight increase of 0.13% Dow Jones Industrial Average It rose 0.55% and closed at a new record.
That means investors have moved away from technology and toward other sectors that might benefit from lower interest rates. Case in point: Financials and energy stocks rose more than 1% on Monday, outperforming the broader market.
Goldman Sachs pointed out that hedge funds’ weekly purchases of financial stocks last week were the highest since June 2023.
“There’s activity in other parts of the market as well, and a lot of that has to do with the rate cuts that are going to take effect in the future,” said Christopher Barto, senior investment analyst at Fort Pitt Capital.
That doesn’t mean technology is no longer in favor. It will likely continue to drive the market. But other industries may emerge as well.
– CNBC’s Hakyung Kim, Pia Singh and Yun Li contributed to this article.
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