US equity markets exhibited a robust performance with notable upward movements in technology and communication services sectors, while most government bond yields showed an upward trend following midday adjustments on Monday. The Nasdaq Composite Index demonstrated a significant rise of 1.5%, achieving a value of 17,997.9.
At the same time, the S&P 500 Index also saw an increase of 1%, rising to 5,560.9, driven largely by strong performances from major technology players such as Alphabet, Meta Platforms, ASML, Nvidia, and Qualcomm. Interestingly, despite a difficult start to the month for the technology sector, which was previously sitting at the bottom of sector performance rankings, the robust gains on this particular day have changed the narrative. The Dow Jones Industrial Average likewise reflected an upward trend, climbing 0.2% to reach 40,378.8, rebounding from a minor decline experienced earlier in the trading session.
However, on the downside, sectors such as consumer staples and energy faced declines during intraday trading. Adding a layer of political intrigue, President Joe Biden announced that he would not be seeking re-election in 2024, endorsing Vice President Kamala Harris as the Democratic Party nominee.
This move could have significant implications for economic policy moving forward. Market analysts at Macquarie speculated that US Treasury yields are expected to remain lower under Harris’s leadership compared to former President Donald Trump. Additionally, they indicated that if Trump were to return, the dollar could strengthen due to anticipated inflationary policies, which may arise from tighter immigration controls, increased tariffs, and an extension of the Tax Cut and Jobs Act into 2025.
In terms of treasury yields, most yields confirmed an upward trajectory throughout the day. The yield on the two-year note rose by 2.9 basis points to 4.53%, mirroring the 10-year yield which also increased by 2.9 basis points, settling at 4.27%. The corporate landscape revealed that IQVIA Holdings experienced a tremendous surge of 6.7%, marking it as the top-performing company within the S&P 500 following the announcement of stronger-than-expected adjusted earnings and revenue for the second quarter.
Furthermore, IQVIA raised its earnings per share forecast for 2024, injecting additional optimism into the market. Conversely, CrowdStrike Holdings faces uncertainties in its financial outlook over the upcoming quarters due to the global technology outage experienced last week. Morgan Stanley analysts expect CrowdStrike might mitigate “reputational damage” in the long run, even as its shares fell more than 13% intraday, making it the worst performer among its peers on both the S&P 500 and Nasdaq indices. Delta Air Lines is also grappling with the repercussions of the Friday technology outage, which has led to a spike in cancellations.
Its shares fell over 2% during the trading session as challenges in recovery efforts persisted. Meanwhile, Onsemi announced its selection as a supplier for Volkswagen Group, tasked with providing power boxes for the automaker's next-generation traction inverter. This multi-year contract led to a surge in Onsemi’s shares, which soared by 5.3%, placing it among the top performers on the S&P 500 and Nasdaq indices. From an economic standpoint, the Chicago Federal Reserve Bank's monthly National Activity Index showed a decline to 0.05 for June, down from 0.23 in May, although it did exceed the anticipated minus 0.09 based on analyst surveys compiled by Bloomberg.
The three-month moving average improved slightly, climbing from minus 0.08 to minus 0.01. In commodities, West Texas Intermediate crude oil experienced a slight decrease of 0.4%, settling at $78.34 per barrel. Additionally, gold prices dipped by 0.2%, landing at $2,394.81 per ounce, while silver remained almost unchanged at $29.31. Overall, the financial landscape remains dynamic as these developments unfold, presenting both opportunities and risks for investors and stakeholders in the market..