By Lisa Pauline Mattkal and Johan M. Cherian
(Reuters) – Wall Street struggled for direction on Thursday as artificial intelligence favorite Nvidia (NASDAQ:) fell after a tech-led rise in the previous session, and investors awaited a key labor market report before the Federal Reserve meets next week to decide on it. On interest rates.
The Nasdaq touched new intraday highs shortly after the open, however, initial gains faded with Nvidia stock falling more than 2%. In the previous session, its market capitalization exceeded $3 trillion and surpassed Apple (NASDAQ:) as the world's second most valuable company.
“Today certainly looks like some sort of profit taking or just a breather for a stock that is up 145% year to date,” said Dave Mazza, CEO of Roundhill Investments.
Gains by Nvidia and other AI-related companies have largely driven Wall Street's rally this year, with the chipmaker accounting for nearly a third of the S&P 500's more than 12% year-to-date gains.
The technology sector led declines, down 0.5%, while an index tracking chip stocks lost 0.8%.
Investors are now focused on the important nonfarm payrolls report, expected on Friday, which they expect will provide more clues about the strength of the labor market and the path of Federal Reserve policy.
A report from the Labor Department on Thursday showed that jobless claims rose more than expected to a seasonally adjusted level of 229,000 for the week ending June 1, the latest in a series of reports suggesting labor market distress is easing, giving the Fed… The Fed has more room to lower interest rates. .
Traders see a 68% chance of a rate cut in September, according to the Chicago Mercantile Exchange's FedWatch tool, and have priced in about two cuts this year, according to LSEG data. Meteorologists polled by Reuters also expect two reductions.
Some market participants also pointed to increasing pressure on the Fed as both the European Central Bank and the Bank of Canada begin easing cycles.
“If there are a lot of disagreements between major economies, that could start to put pressure on different pockets of the economy,” said investment strategist Ross Mayfield. “It might make something like the (Federal Reserve) cut in September a little more pronounced.” . Analyst at Baird.
Five of the 11 S&P 500 sectors gained, led by a 0.6% rise in consumer staples.
Gains by software companies, including a 2.5% rise in Salesforce (NYSE:), helped the Dow Jones outperform.
At 12:08 p.m. EDT, the index was up 20.85 points, or 0.05%, at 38,828.18, the S&P 500 was down 4.87 points, or 0.09%, at 5,349.16, and the index was down 20.95 points, or 0.12%, at 17,166.95.
Among other things, Lululemon Athletica (NASDAQ:) rose 5% after beating expectations for first-quarter earnings and revenue on Wednesday.
US-listed NIO shares fell 6.5% after the Chinese electric car maker reported a quarterly net loss.
Five Below (NASDAQ:) stock fell 12.9% after the discount store operator cut its forecast for annual net sales.
Declining issues outnumbered advancing stocks by a ratio of 1.06 to 1 on the New York Stock Exchange. Declining issues outnumbered advancing stocks by a ratio of 1.50 to 1 on the Nasdaq.
The S&P 20 recorded a new 52-week high and 5 new lows, while the Nasdaq recorded 51 new highs and 68 new lows.