Closing Stock Market SummaryThere were no Monday blues for the stock market. Instead, stock monitors were generally awash in green figures as market participants succeeded in maintaining the momentum of Friday's late rebound effort.
JPMorgan Chase (JPM 124.58, +7.28, +6.2%) raising its net interest income outlook, reports that Broadcom (AVGO 526.36, -16.83, -3.1%) is in talks to acquire VMWare (VMW 119.90, +24.19, +25.3%) in a cash-and-stock deal, and an acknowledgment by President Biden that he is considering lifting some Chinese tariffs to help ease inflation pressures played a supportive role in today's rebound-minded trade.
The featured performer, however, was the stock market's prior performance, which is to say market participants subscribed to the notion that recent selling activity had gotten overdone, leaving the indices ripe for a rebound campaign.
Entering today, the Nasdaq Composite had declined 20.1% since the end of March, the S&P 500 had dropped 13.9%, and the Dow Jones Industrial Average had fallen 9.9%.
Sure enough, today's market narrative included a contention that month-end rebalancing activity would go in favor of stocks. We are not at month end yet, but we are in the home stretch, so that view resonated as a factor behind the stock market's resilience to selling efforts today.
It also fit with the broad-based buying interest seen in today's market. The Russell 3000 Value Index was up 1.5% and the Russell 3000 Growth Index was also up 1.5%.
All 11 S&P 500 sectors closed in positive territory. The financial sector (+3.2%), bolstered by JPMorgan Chase's guidance and some value hunting, led the way. It was joined at the top of the performance table by the energy (+2.7%), information technology (+2.4%), and consumer staples (+2.1%) sectors.
The latter was perhaps the surest sign of the market's rebound-minded bid considering that the consumer staples sector was one of last week's worst-performing sectors. The consumer discretionary sector (+0.6%), also a huge laggard last week, was today's weakest sector, although it managed to recover from an early 1.9% decline.
Treasuries generally tracked lower today, as stock prices tracked higher, in a curve-steepening trade. The 2-yr note yield settled up three basis points at 2.61% while the 10-yr note yield ended up seven basis points at 2.86%. A strong move by the euro against the dollar (EUR/USD +1.2% to 1.0686), after ECB President Lagarde teased the possibility of exiting negative rates by the end of Q3, was another factor weighing on Treasuries.
The U.S. Dollar Index fell 1.0% to 102.09. WTI crude futures settled the session up 0.2% at $110.31/bbl while natural gas futures spiked 7.9% to $8.84/mmbtu.
There was no U.S. economic data of note today. Tuesday's session will feature the preliminary IHS Markit Manufacturing and Services PMIs for May at 9:45 a.m. ET and the New Home Sales Report for April at 10:00 a.m. ET.
- Dow Jones Industrial Average -12.0% YTD
- S&P 500 -16.6% YTD
- Russell 2000 -20.4% YTD
- Nasdaq Composite -26.3% YTD