S&P 500 dips slightly to start the week, sits inches from a record high
07 Jun 2021
The S&P 500 fell slightly on Monday as the benchmark struggled to make a run at a record high after a winning week.
The broad equity benchmark dipped 0.2%, sitting just 0.4% from its intraday record high earlier in May. The Dow Jones Industrial Average fell 60 points. The Nasdaq Composite was flat.
The benchmark advanced 0.6% last week to bring its 2021 gains to more than 12%. The Dow and Nasdaq also posted gains last week.
Tech stocks were weak in morning trading, weighing on sentiment a bit. Shares of Zoom and Tesla each fell about 1%.
Visa shares were higher, gaining 1% following an upgrade by Piper Sandler.
“Stocks have climbed back toward record-high territory as the pace of the economic recovery appears to be well-balanced,” said Craig Johnson, chief market technician at Piper Sandler. “Signs of rising inflation have mostly been offset by rising subscriptions to the Fed’s ‘transitory’ outlook.”
Friday’s jobs report showed the unemployment rate dropping to 5.8% from 6.1% and that 559,000 jobs were added in May. The report was seen as strong enough to keep investors’ confidence in the economy, but light enough to keep the Federal Reserve from rushing to change its easy money policies.
Investors are focused on inflation data in the week ahead, with May’s Consumer Price Index (CPI) scheduled to be released Thursday. In April the CPI rose 4.2% from the previous year, the fastest increase since 2008. If prices continue to rise it could cause the Federal Reserve to step back from its easy policies.
Over the weekend the G-7 nations reached an agreement on global tax reform, calling for the world’s largest corporations to pay at least a 15% tax on their earnings. That’s lower than the Biden administration’s initial suggestion of a minimum 21% tax rate, which didn’t garner much enthusiasm in other countries. Major companies including Facebook and Google have responded favorably to the agreement.
Meme stocks are back in the spotlight again this week. AMC rallied 20% on Monday. Most of these speculative stocks, including GameStop, AMC and BlackBerry, ended the week in the red despite massive gains after a volatile trading week.