Stocks finished slightly lower Friday, but AI proved to be the big story for the first half of 2024.
The Dow Jones Industrial Average lost 45 points, or 0.12%, to end at 39,118.36, while the S&P 500 dipped 0.41% to 5,460.48 and the tech heavy Nasdaq lost 0.71% to finish the session at 17,732.60.
Nike shares tumbled nearly 20% to end at $75.37 following a mixed fourth quarter earnings report that included a major change in the sportswear company's fiscal year sales forecast.
The personal consumption expenditures price index Fed’s preferred inflation metric was roughly unchanged in May from a month ago, pulling the annual rate of inflation down to 2.6%.
“The soft inflation data will build the case that the Fed can start cutting rates in the coming months,” Jeffrey Roach, Chief Economist for LPL Financial said.
“As long as incomes grow at a healthy clip, consumers will keep spending," he added. "The key is the labor market and so now, we should shift our attention to next week’s nonfarm payroll release for a fresh look into the job market.”
Nasdaq led the way over the first half, climbing 18.1% as the artificial intelligence craze captured investor excitement, CNBC reported . The broad S&P 500 jumped 14.5%, while the blue-chip Dow lagged with a gain of about 3.8%.
Updated at 12:01 PM EDT
Holding gains
The S&P 500, which topped the 5,500 point mark earlier in the session, was last seen trading 15 points higher on the session, but just underneath that record threshold, heading into the final hours of the second quarter.
The Dow was last seen 64 points higher, even with a 2.2% decline for Disney ( DIS ) that takes the stock below the $200 mark, while the Nasdaq added 54 points, or 0.3%.
Updated at 10:38 AM EDT
Tesla revving
Tesla shares rose past the $200 mark for the first time since March in early trading, and were last marked 2.1% higher at $201.55 each, heading into next week's second quarter delivery numbers and the carmaker's Robo taxi reveal in early August.
Updated at 9:59 AM EDT
Nike crash
Nike shares are on pace for their biggest single-day decline since 2001 following a mixed fourth quarter earnings report that included a major change in the sportswear group's fiscal year sales forecast.
Nike shares were marked 18% lower in early Friday trading to change hands at $77.23 each, a move that would extend the stock's year-to-date decline toa round 28%.
The S&P 500 was marked 17 points, or 0.31% higher heading into the final trading day of the quarter, with the Nasdaq rising 33 points, or 0.19%. The Dow was last up 167 points in the opening minutes, paced by early gains for JPMorgan ( JPM ) and Goldman Sachs ( GS ) .
Updated at 8:47 AM EDT
More softness
The Federal Reserve's preferred measure of inflation eased modestly in May, falling to 2.6%, the lowest levels in more than three years, in a move that could cement the case for an autumn rate cut.
A softer-than-expected reading for personal spending, as well as the unchanged level for monthly headline price pressures, filled out the Bureau of Economic Analysis' May report.
Stocks were little-changed following the data release, with the S&P 500 called 20 points higher and the Dow Jones Industrial Average looking at an early point advance.
Benchmark 10-year note yields eased 4 basis points to 4.275% following the release, while 2-year notes eased 3 basis points to 4.6871%.
The S&P 500, which has printed more than 30 record highs so far this year, carries a quarterly gain of 4.35% heading into the Friday session, powered largely by the surge in AI-related tech stocks, while the Nasdaq is up more than 9%.
Those levels will be tested today by a a key May inflation report, the PCE price index, that is expected to show the softest monthly pressures in more than three years.
The PCE gauge, which is closely tracked by Federal Reserve officials, is likely to show headline and core inflation eased to 2.6% in May, added further fuel to market bets that the Fed will begin reducing its benchmark interest rate in September.
Benchmark 10-year Treasury note yields were little-changed at 4.31% heading into the data release at 8:30 am Eastern time, with 2-year notes pegged at 4.729%.
Fed Chairman Jerome Powell and his colleagues will be closely tracking changes in the BEA's May PCE inflation report.
The U.S. dollar index, meanwhile, eased from a year-to-date high in overnight trading that was tied in part to what analysts have said was a poor performance from President Joe Biden in last night's debate with his predecessor and challenger, Donald Trump.
Biden appeared shaky and uncertain during key moments in the 90 minute contest, and misquoted crucial economic statistics as he defended his record against an onslaught of attacks by the former President.
The dollar was last seen trading 0.02% lower on the session, but close to the highest levels of the year against a basket of its global peers at 105.881.
A major reshuffle of the Russel indices, which include both small and large-cap stocks, will also wrap up Friday will the likely elevation of many of the AI-related names that have powered markets higher for much of the past year.
Heading into the start of the trading day, futures contracts tied to the S&P 500 suggest an 18 point opening bell gain, while those linked to the Dow Jones Industrial Average are priced for a 30-point bump.
The Nasdaq, meanwhile, is called 75 points higher with premarket gains for Nvidia ( NVDA ) , Micron ( MU ) , Tesla ( TSLA ) and Apple ( AAPL ) powering the advance.
Other stocks on the move include Nike ( NKE ) , which plunged nearly 15% in premarket following a disappointing fourth quarter earnings report that included a gloomy outlook for sales over the coming financial year.
Trump Media & Technology Group ( DJT ) shares, meanwhile, were marked 10% higher at $40.20 each.
In overseas markets, Europe's Stoxx 600 was marked 0.31% higher heading into Sunday's parliamentary elections in France, while Britain's FTSE 100 rose 0.58% in London with next week's national elections in focus.
Overnight in Asia, the yen held steady at around 106.58 against the surging U.S. dollar, suggesting at least the chance of intervention from government officials in Tokyo, with the Nikkei rising 0.61% into the close of trading.
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