Nvidia shares rise nearly 5% after unveiling new AI chips, boosting the Nasdaq Composite
The Dow Jones Industrial Average declined on the first trading day of June after weak US manufacturing data raised concerns about the economy, reported CNBC.
Banks, industrials, and other shares dependent on economic growth led the pullback.
The 30-stock Dow dropped 115.29 points, or 0.30 percent, closing at 38,571.03. The S&P 500 edged up 0.11 percent to end the session at 5,283.40, while the Nasdaq Composite increased by 0.56 percent to 16,828.67.
Cyclical stocks closely tied to economic growth fell, with the energy, industrials, and materials sectors ending in the red. The US manufacturing sector showed signs of slowing, with the ISM manufacturing index at 48.7 in May, causing Treasury yields and the dollar to fall.
A reading below 50 indicates contraction.
Nvidia's shares rose nearly 5 percent after announcing a new suite of artificial intelligence chips, indicating its intent to remain competitive. The chipmaker plans to upgrade its AI chip architecture annually.
Wall Street recently experienced a strong May, with all three major averages achieving their sixth positive month in seven. The Nasdaq rose 6.9 percent in May, marking its best month since November 2023. However, the rally lost momentum near the month's end.
All three averages closed May more than 1 percent below their record highs, even as the Dow gained over 500 points on Friday. The Nasdaq fell 1.1 percent last week as chip stocks stumbled.
“With technicals still stretched, a little fear baked in, and sentiment looking optimistic, we’re sticking with our call for volatility to pick up over the summer,” wrote Chris Senyek, chief investment strategist at Wolfe Research.
The first week of June is packed with more economic updates. Investors are looking forward to private payroll data from ADP on Wednesday and the May jobs report on Friday.
They are hoping for some economic slowing that would allow the Federal Reserve to cut interest rates, but not a slowdown severe enough to raise recession fears.
Earlier on Monday, a technical issue at the New York Stock Exchange affected price quotes for several stocks, but trading returned to normal by midday.
