By Sinéad Carew and Ankika Biswas
(Reuters) -The Nasdaq rose 1.3% on Tuesday, buoyed by the strength of Nvidia (NASDAQ:) and other tech megacaps, while the Dow Jones fell as retailers weighed and investors awaited crucial inflation data due this week.
AI chip company Nvidia climbed 6.8%, recovering after a three-session sell-off, and the broader chip sector outperformed, with the Philadelphia Semiconductor index adding 1.8%.
Chips were among the biggest drivers of the tech index’s recovery after a three-day decline, while companies like Alphabet (NASDAQ:), up 2.7%, and Meta Platforms (NASDAQ:), up 2.3 %, gave the greatest impetus to communication. services index.
The rest of the S&P 500’s 11 major industrial sectors were much weaker Tuesday compared to yesterday’s session, when previously lagging sectors such as energy and utilities were the biggest gainers.
“Seeing technology stocks rise has been a key driver” of Tuesday’s market, said Emily Roland, co-chief investment strategist at John Hancock Investment Management. She added that, after a few days of weakness, “investors who picked up some of these names today were looking for a better entry point.”
Possibly contributing to the mega-cap bias was the Conference Board survey, which showed that US consumer confidence fell slightly in June due to concerns about the economic outlook. The consumer confidence index fell to 100.4 from a downwardly revised 101.3 in May.
“In an environment where economic growth is potentially slowing, and we see signs of that, that would generally benefit higher quality stocks that are less sensitive to the economic cycle,” Roland said.
Shares fell 299.05 points, or 0.76%, to 39,112.16, while the S&P 500 gained 21.43 points, or 0.39%, to 5,469.30 and gained 220.84 points, or 1.26 %, to 17,717.65.
The Dow Jones retreated Monday after hitting a one-month high and a home improvement retailer DIY store (NYSE:) was the biggest percentage decliner, down 3.6%
Creating some jitters were retail giant Walmart (NYSE:), whose shares fell 2.2% after its CFO labeled the second quarter as the “most challenging quarter” at the NYSE 2024 European Investor Conference in London.
After three straight winning sessions, the Dow Jones Transport Average closed 0.8% lower after falling around 1.6% earlier in the day. Freight transport company Norfolk South (NYSE:) was the second-biggest decliner after an analyst cut its price target and the National Transportation Safety Board reviewed a derailment last year and recommended safety changes.
However, after falling 0.05% in the regular session, transportation heavyweight FedEx (NYSE:) rose 15% in after-hours trading as it forecast 2025 earnings above analysts’ expectations. It said it expected planned cost cuts to deliver margin gains even as revenues remain under pressure from subdued parcel shipping demand.
The most anticipated economic data for this week is Friday’s personal consumption expenditures (PCE) price index – the Fed’s inflation gauge.
Shares of Spirit AeroSystems (NYSE:) fell 3.96% to $31.76 after a media report Monday said Boeing (NYSE:) had offered to buy the aircraft fuselage manufacturer in a mostly stock deal, valuing the key supplier at about $35 per share. Shares of Boeing also fell 2.2%.
Cruise operator Carnival (NYSE:) Corp rose 8.7% after raising its annual profit forecast for the second time this year.
On the NYSE, there were 122 new highs and 87 new lows.
On the Nasdaq, 1,681 shares rose and 2,589 fell as declining issues outpaced advancers by a 1.54-to-1 ratio.
The S&P 500 posted 20 new 52-week highs and 4 new lows, while the Nasdaq Composite posted 45 new highs and 178 new lows.
On US stock exchanges, 10.01 billion shares changed hands, compared to the moving average of 11.90 billion over the past 20 sessions.
