Megacap tech names lead US markets to new record

Megacap tech names led the broader market to another record close as Nvidia hit a new intraday all time high amid growing optimism about Fed rate cuts.

The S&P 500 rose 0.77 per cent to finish at a new record 5,473.23. The tech heavy Nasdaq rallied 0.95 per cent to close at 17,857.02 and the Dow Jones snapped a four day losing streak to close 0.49 per cent higher.

Megacap technology stocks led the rally with Apple rallying 2 per cent, Microsoft rising more than 1 per cent, and Alphabet, Amazon and Meta Platforms also closing higher. Broadcom shares surged 5.4 per cent to hit new highs.

Nvidia hit a new intraday high on news that State Street is looking at the possibility of re-weighting the AI giant higher in its tech ETF at the end of June. Based on current methodology Nvidia could be re-weighted to as much as 20 per cent of the ETF at the expense of Apple. The State Street ETF (Ticker XLK) is one of the largest sector ETF’s at US$71 billion.

If the rebalance occurs as expected State Street will need to buy approx $US11 billion of Nvidia shares and sell $US12 billion of Apple.

On the Macro news front, all eyes now turn to tomorrow’s May retail sales data, and home sales and housing starts data due later in the week.

US crude oil rose nearly 1 per cent on Monday to trade above $79 per barrel as markets expect a tightening in supply/demand in the third quarter as summer fuel demand draws down inventories.

Turning to US sectors, the best performer was Consumer Discretionary which closed up 1.43 per cent. The worst performer was Utilities which finished down 1.14 per cent on the day.

Turning to domestic markets, investors will be focused on the RBA policy announcement due at 2.30pm AEST today. Expectations are for rates to remain unchanged. However, there key interest will be around the commentary provided by RBA Governor Michelle Bullock.

Futures

The SPI futures are pointing to a 0.4 per cent gain.

Currency

One Australian dollar at 7.35am was buying 66.11 US cents.

Commodities

Gold has lost 0.86 per cent. Silver has fallen 0.27 per cent. Copper has dropped 0.98 per cent. Oil has gained 2.40 per cent.

Figures around the globe

European markets closed mixed. London’s FTSE fell 0.06 per cent, Frankfurt added 0.37 per cent, and Paris closed 0.91 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei fell 1.83 per cent, Hong Kong’s Hang Seng shed 0.03 per cent while China’s Shanghai Composite closed 0.55 per cent lower.

Yesterday, the Australian share market closed 0.31 per cent lower at 7,700.27.

Ex-dividends
Premier Investments (ASX:PMV) is paying 63 cents fully franked

Dividends payable
Probiotec Ltd (ASX:PBP)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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