Stock market today: Nvidia rebound fuels Nasdaq rally as Dow falls 300 points

US stocks closed mixed on Tuesday, pulled in opposite directions by the Nasdaq and the Dow, as AI chipmaker Nvidia (NVDA) rebounded from a three-day skid to surge nearly 7%.

The tech-heavy Nasdaq Composite (^IXIC) finished the day up roughly 1.3%, while the benchmark S&P 500 (^GSPC) rose around 0.4%, both breaking three-session losing streaks. The Dow Jones Industrial Average (^DJI) remained the only major index in the red, slipping 0.8%, or about 300 points, after a surge to start the week.

On Monday, the Nasdaq and S&P 500 took a bruising as Nvidia's slide dented the tech rally that has powered gains this year. Investors are seen as taking profits scored in AI-linked names as a stellar quarter draws to a close, raising the question of whether recent losses have further to go.

Elsewhere, the wait is on for Friday's update to the Personal Consumption Expenditures (PCE) index, a favored inflation input for the Federal Reserve. Governor Michelle Bowman on Tuesday stressed she's willing to hike interest rates if holding them steady fails to bring price pressures under control.

On the economic data front, home prices set a new record high in April although annual growth slowed from the previous month, according to the S&P CoreLogic Case-Shiller report.

Meanwhile, a reading on consumer confidence highlighted cracks in previous resilience. According to the latest reading from the Conference Board, the index came in at 100 for the month of June, below the 101.3 seen in May. The results were in line with what economists surveyed by Bloomberg had expected.

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Market close: Nasdaq rallies while Dow falls

Tue 25 June 2024 at 4:04 pm GMT-4, Alexandra Canal

US stocks closed mixed on Tuesday as a rebound in shares of AI chipmaker Nvidia (NVDA) fueled a Big Tech rally while recent economic data and hawkish Fed commentary dragged down the Dow.

The tech-heavy Nasdaq Composite (^IXIC) finished the day up roughly 1.3%, while the benchmark S&P 500 (^GSPC) rose around 0.4%. The Dow Jones Industrial Average (^DJI) remained the only major index in the red, slipping 0.8%, or about 300 points, after a surge to start the week.

Nvidia's recent rally surpassed Cisco's run in this metric

Tue 25 June 2024 at 3:41 pm GMT-4, Josh Schafer

Leading into a recent drawdown that began reversing on Tuesday, Nvidia stock had been on a tear.

At its recent peak, the stock was trading nearly 100% higher than its 200-day moving average, a technical indicator that calculates the average closing price for the last 200 days.

Dating back to 1990, the largest stock in the stock market, which Nvidia recently became for a brief period, had never traded this far above its 200-day moving average, according to data from BTIG chief market technician Jonathan Krinsky.

This move, Krinsky said, put Nvidia in a "league of its own."

Prior to this run, the largest spread seen from a 200-day moving average came in 2000, from none other than Cisco, the darling of the dot-com bubble. The move came in late March 2000, just before the bubble popped.

Krinsky did note "the fundamentals are much different this time around," but added, "We remain concerned about a near-term unwind of many [year-to-date] leaders."

Alphabet, Carnival, Home Depot: Stocks trending in afternoon trading

Tue 25 June 2024 at 2:33 pm GMT-4, Alexandra Canal

Here are some of the stocks trending on the Yahoo Finance homepage in afternoon trading:

Alphabet (GOOG, GOOGL): The tech giant saw shares rise about 2% on Tuesday after reports circulated the company plans to show off new artificial intelligence features, which will include updates to its Pixel devices and Android platform, at a "special event" slated for Aug. 13.

Carnival Corporation (CCL): Shares of the cruise operator surged more than 8% on Tuesday after the company beat earnings on both the top and bottom lines and raised its full-year guidance. Carnival also said it's seen a surge in advanced bookings, signaling robust demand for 2025.

Home Depot (HD): Shares of the home improvement giant slid over 3% after Pool Corp. (POOL) warned of "lower new pool construction and remodel activity" amid the current macroeconomic backdrop. Shares of builders and other home improvement giants like Lowe's (LOW) also moved lower on the news.

Is the Big Tech rally a risk for stocks? Maybe not...

Tue 25 June 2024 at 1:47 pm GMT-4, Alexandra Canal

This year's stock market rally has been led by just a few large tech names — but that might not be such a bad thing.

Yahoo Finance's Josh Schafer has the scoop:

"We see a small group of tech winners leading stock gains as a feature of the artificial intelligence (AI) theme — not a flaw," Jean Boivin, head of the BlackRock Investment Institute, wrote in a research note on Monday. "We stay overweight U.S. stocks."

AI darling Nvidia (NVDA) has accounted for nearly one-third of the S&P 500's gains this year, and outperformance in quarterly results from large-cap tech continues to be a reason why earnings for the S&P 500 are growing year over year.

As of Monday's close, Apple (AAPL), Alphabet (GOOG, GOOGL), Microsoft (MSFT), Amazon (AMZN), Meta (META), and Broadcom (AVGO) had also contributed more than a quarter of the major index's gains.

One potential concern is that the market could be at risk if a few large tech companies that have driven a lion's share of the gains stop surprising to the upside.

However, research from Morgan Stanley's chief investment officer, Mike Wilson, shows this might not be an issue.

Wilson found roughly 20% of the top 500 stocks are outperforming the broader index over a rolling one-month period. This is the lowest percentage of companies outperforming in Wilson's dataset dating back to 1965.

Wilson's work noted that after similar narrow breadth readings where less than 35% of companies are outperforming the index on a one-month basis, the S&P 500 rose about 4% on average over the next six months.

"Narrow breadth can persist but it's not necessarily a headwind to forward returns in and of itself," Wilson said. "We believe broadening is likely to be limited to high-quality/large-cap pockets for now."

Wilson argued that when considering the impact of high interest rates on corporations, this makes sense. Investors have flooded large-market-cap stocks that have held up well in the higher rate environment and are seeing earnings grow more than their smaller peers.

And a slew of recent upgrades to year-end S&P 500 targets reflect similar sentiment. Three Wall Street firms cited tech outperformance as part of the reason the index is doing better than they initially thought this year.

Tech sector biggest gainer as real estate lags

Tue 25 June 2024 at 12:41 pm GMT-4, Alexandra Canal

Tech was the biggest leader in Tuesday's trading session, lifted by a rebound in shares of AI darling Nvidia (NVDA). The chipmaker rose over 5% after a fall of over 6% on Monday.

The communications and services sector also saw a lift in the session while real estate served as the biggest laggard, dragged down by more disappointing housing data.

Home prices set a new record high in April, according to the S&P CoreLogic Case-Shiller report, although it wasn't all doom and gloom as annual growth slowed from the previous month.

Overall, markets were mixed with a 1% jump in the Nasdaq Composite (^IXIC) competing against a 1% drop in the Dow Jones Industrial Average (^DJI). The S&P 500 (^GSPC) traded in positive territory, up about 0.1%.

S&P 500 sectors (Courtesy: Yahoo Finance)

Nvidia snaps 3-day losing streak

Tue 25 June 2024 at 11:50 am GMT-4, Alexandra Canal

Nvidia stock (NVDA) climbed about 5% on Tuesday, reversing a three-day slide that erased roughly $430 billion of the AI chip giant's market cap.

It was a stark fall from grace for the stock, which hit a record close exactly one week ago when it briefly surpassed Microsoft (MSFT) as the most valuable company in the world.

Yahoo Finance's Ines Ferré has more:

"I think it's way overblown," Kenny Polcari, managing partner at Kace Capital Advisors, said of the sell-off. "I don't think people should be nervous about what's happening with Nvidia."

“I would use this weakness as an opportunity," he added, noting the timing of the decline.

“We’re at the end of the quarter, so it’s a quarter-marking period. You’ve got a lot of big assets that are trying to reshuffle and rebalance," he said.

Polcari added he wouldn't be surprised if the stock slid "another 5% or 8%.”

On Tuesday, Nvidia's market cap climbed back to hover around the $3 trillion market cap, though it was still below the valuations of Microsoft or Apple (AAPL).

Nvidia has played a pivotal role in buoying the S&P 500 (^GSPC) and the Nasdaq (^IXIC) to repeated record highs in 2024. The Santa Clara, Calif.-based company completed a 10-for-1 stock split on June 10.

Bitcoin pries back above $60K

Tue 25 June 2024 at 11:03 am GMT-4, Alexandra Canal

Bitcoin (BTC-USD) prices are regaining some strength after prices dipped below $60,000 on Monday — their lowest level since early May.

The cryptocurrency saw prices rebound about 1% to trade above $61,650 a coin in late morning trading on Tuesday. Other cryptos like Ethereum (ETH-USD) also rose following Bitcoin's positive moves.

Bitcoin is down about 12% over the past three months but is still up more than 45% on the year, buoyed by recent SEC approvals of spot bitcoin ETFs.

Consumer confidence dips slightly in June

Tue 25 June 2024 at 10:04 am GMT-4, Josh Schafer

Consumer confidence declined slightly in June, putting a halt to any signs of a rebound.

The latest index reading from the Conference Board was 100, below the 101.3 seen in May and in line with the 100 economists surveyed by Bloomberg had expected.

"Confidence pulled back in June but remained within the same narrow range that's held throughout the past two years, as strength in current labor market views continued to outweigh concerns about the future. However, if material weaknesses in the labor market appear, Confidence could weaken as the year progresses," said Dana M. Peterson, chief economist at The Conference Board.

Peterson added, "Consumers expressed mixed feelings this month: their view of the present situation improved slightly overall, driven by an uptick in sentiment about the current labor market, but their assessment of current business conditions cooled."

Opening bell: Nasdaq jumps, Dow slips

Tue 25 June 2024 at 9:34 am GMT-4, Alexandra Canal

US stocks opened mixed on Tuesday as AI chipmaker Nvidia (NVDA) eyed a cautious comeback from a three-day skid, rising more than 0.2% in early trading.

The tech-heavy Nasdaq Composite (^IXIC) moved up roughly 0.5%, while the benchmark S&P 500 (^GSPC) rose 0.2%. The Dow Jones Industrial Average (^DJI) remained the only major index in the red, slipping about 0.2% after surging over 200 points to start the week.

Home prices hit new record in April

Tue 25 June 2024 at 9:23 am GMT-4, Dani Romero

Home prices set a new record high in April as the market remains tight. But annual growth slowed from the previous month.

Home prices in the 20 largest US metros increased 7.2% in the last 12 months ending in April, lower than the 7.5% annual gain in the previous month, according to the S&P CoreLogic Case-Shiller. On a monthly basis, home prices across the 20 biggest cities increased 0.4% in April compared to the previous month.

Low inventory, high mortgage rates, and record home prices have put the housing market out or reach for many would-be buyers. Economists at Bank of America believe that housing hurdles aren’t going away anytime soon.

“The US housing market is stuck, and we are not convinced it will become unstuck anytime soon,” Michael Gapen, an economist at Bank of America, wrote in a note to clients on Monday.

“After a surge in housing activity during the pandemic, it has since retreated and stabilized. We view the forces that have reduced affordability, created a lock-in effect for homeowners, and limited housing activity will remain in place through our forecast horizon,” the economist added.

To this point, the investment bank believes that the pandemic housing shocks still have to pass through the market. Bank of America expects home prices to rise by about 4.5% this year and 5.0% next year, but then fall back to 0.5% in 2026.

1 key market risk for 2025

Tue 25 June 2024 at 6:40 am GMT-4, Brian Sozzi

As if you need another money thing to worry about.

In an exclusive interview with Yahoo Finance's Jennifer Schonberger late Monday, US Treasury Secretary Janet Yellen reminded investors that the Trump tax cuts are set to expire in 2025.

I can't think of the last investor I talked to who expressed a concern about the expiration and how it may impact markets.

But Yellen did her best job to bring this back into the light:

"The signature policy from the Trump years was the Tax Cut and Jobs Act, and it promised an investment boom which really did not materialize. It gave huge tax breaks to corporations and to wealthy individuals. And it resulted in an enormous increase in the deficit and lowered tax revenues below historic norms. And I think it's responsible for many of the problems that we face now with our fiscal trajectory. And so that would concern me to leave all of that in place."

How the markets will react in 2025 should the tax cuts not get extended due to deficit concerns is, of course, wildly unknown today. It shouldn't be ignored in your investment planning process, however. Consider this alone: No tax cut extension would mean the top tax rate would return to 39.6% from 37%.

That's real money for real people.

You can watch Jenn's full interview with Treasury Secretary Janet Yellen below.

A helpful reminder on Nvidia

Tue 25 June 2024 at 6:22 am GMT-4, Brian Sozzi

While everyone appears to now be an Nvidia (NVDA) expert and is out there waxing poetic on the stock's recent abrupt slide, I will not go that route this morning.

Instead, I wanted to serve up some factual numbers with the help of BTIG's technical analyst Jonathan Krinsky. They provide nice context on why Nvidia shares are taking a little pause.

Here's what Krinsky has to say, as if to remind the masses that stocks don't go up every single day.

"NVDA recently traded ~100% above its 200 day moving average. Since 1990, the widest spread that any U.S. company has ever traded above its 200 day moving average while it was the largest company was 80% by Cisco (CSCO) in March 2000, which marked its all-time high. In other words, NVDA is in a league of its own. It's also notable that at last week's peak, NVDA surpassed Microsoft (MSFT) briefly as the largest U.S. company. On March 24, 2000, CSCO surpassed MSFT briefly to also become the largest market cap company, and that marked the peak of both CSCO and the Nasdaq to the day. While we fully recognize the fundamentals are much different this time around, in the last five years, NVDA is +4,280% compared to CSCO's +4,460% gain in the five years leading up to its peak. Over the last 18 months, NVDA is +827% which is actually double that of CSCO's 18-month gain into '00."