Written by Echo Wang
(Reuters) – The indexes and the Nasdaq closed slightly lower on Friday, dragged down by a decline in Nvidia (NASDAQ:) shares for the second day in a row, dragging the technology sector lower.
Technology was the biggest loser among the 11 major sectors in the Standard & Poor's 500 index, down 0.84%, dragged down by NVIDIA stock, while communications services led the gains.
“It's Nvidia's game, and the rest of us are just pretending we're here,” said Michael Green, chief strategist at Simplify Asset Management in Philadelphia.
“All activity is now mainly focused on Nvidia connectivity options,” he added. “Seven million Nvidia options contracts have been traded. That's something like three or four times the contract volume that would have been traded in the market in total five years ago.”
The Standard & Poor's 500 index rose 8.55 points, or 0.16%, to 5,464.62 points, and the index lost 32.23 points, or 0.18%, to 17,689.36 points.
Megacaps Microsoft (NASDAQ:), Alphabet (NASDAQ:), and Amazon.com (NASDAQ:) rose between 0.92% and 1.89%. Apple (NASDAQ:) stock fell by 1.04%.
“We've had a very strong performance, especially in the S&P over the last couple of weeks. So it's not surprising to see things stop and stabilize,” said Zachary Hill, head of portfolio management at Horizon Investments in Charlotte, North Carolina.
Friday trading may be more volatile than usual due to triple witching, and the simultaneous expiration of stock options, stock index options, and stock index futures.
US business activity hit a 26-month high in June amid a rebound in hiring, while easing price pressures suggest the recent inflation slowdown may continue.
The services PMI rose to 55.1 this month, above expectations of 53.7, while the manufacturing PMI rose to 51.7, compared with expectations for a decline to 51.
Home sales in May fell to a seasonally adjusted annual rate of 4.11 million units versus expectations of 4.10 million units.
Financial markets still expect a 58% probability of a 25 basis point rate cut in September, and still expect roughly two rate cuts this year, according to FedWatch data from LSEG.
Shares of artificial intelligence chip company Nvidia fell by 3.22%, while shares of semiconductor companies Qualcomm (NASDAQ:), Broadcom (NASDAQ:) and Micron Technology (NASDAQ:) fell between 1.36% and 4.38%.
Wall Street's big gains since the final stretch of 2023 have been driven primarily by the likes of Nvidia and a handful of other AI-related heavyweight stocks. However, analysts have raised concerns about whether the strong increase in their ratings is sustainable.
Spirit AeroSystems (NYSE:) shares rose 6.00% after a Reuters report that Boeing (NYSE:) is nearing a deal to buy back the aircraft parts supplier after months of talks.
Sarepta Therapeutics (NASDAQ:) shares rose 30.14% after the US Food and Drug Administration allowed expanded use of the company's gene therapy to patients with Duchenne muscular dystrophy ages four and older.
Declining issues outnumbered advancing stocks by a ratio of 1.03 to 1 on the New York Stock Exchange. There were 98 new highs and 73 new lows on the NYSE.
The S&P 500 recorded 23 new 52-week highs and two new lows while the Nasdaq Composite recorded 34 new highs and 186 new lows.
Trading volume on US stock exchanges reached 17.68 billion shares, compared to an average of 12.05 billion for the full session during the last 20 trading days.