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Market Moves Yesterday
S&P 500 @ 5,360.79 ( ⬆️ 0.26%)
Nasdaq Composite @ 17,192.53 ( ⬆️ 0.35%)
Bitcoin @ $67,739.21 ( ⬇️ 2.83%)
Hey Scoopers,
Happy Tuesday! Let’s dive in with today’s financial news:
👉 Apple’s big AI plans
👉 The S&P 500 index rebalancing
👉 Eli Lilly’s new drug
So, let’s go 🚀
Market Wrap 📉
Equity indices such as the S&P 500 and Nasdaq Composite closed at fresh records, primarily driven by tech stocks, as investors looked ahead to the Fed’s interest rate decision.
Semiconductor giant Nvidia added 0.8% as the stock’s 10-for-1 split took effect. Further, social media company Meta Platforms jumped close to 2%, pushing the S&P 500 tech sector higher.
The Fed’s latest rate decision and May’s consumer price index, scheduled for Wednesday, could be key tests for investors. Last week’s strong jobs report suggests the central bank is unlikely to lower interest rates.
According to the CME FedWatch Tool, markets are now pricing in just one rate cut this year which might take place in November.
Trending Stocks 🔥
DXC Technology- The IT stock gained over 18% after Reuters reported a joint acquisition bid from Apollo Global and Jyndryl Holdings.
AMD - Shares of the chipmaker tumbled 4.5% following a downgrade from Morgan Stanley as the investment bank expects AI tailwinds to be overblown.
Southwest Airlines - The airline company jumped 7% after activist hedge fund Elliott Management amassed a $1.9 billion stake in Southwest Airlines.
Apple’s AI Push
Shares of Apple fell close to 2% following its annual WWDC (Worldwide Developers Conference) yesterday. The big news was the hardware giant’s push into artificial intelligence, called Apple intelligence.
Here are the key takeaways from Apple’s WWDC event:
Apple announced that Siri could tap into OpenAI’s ChatGPT when needed. Siri will ask users if they want to share the question with ChatGPT and will then return suggestions from the OpenAI chatbot.
Apple introduced a new form of custom emojis called Genmoji, allowing users to create their own emojis using AI. Moreover, users will be able to create Genmojis that look just like their friends.
You can now use Siri via text and correct your statements in real time. Siri will be powered by Apple Intelligence and able to answer “thousands of questions” about how to use your Apple device.
Apple also announced a Password app for iPhone, iPad, Mac, Vision Pro, and Windows. The app will help you store all your passwords, including verification codes, app passwords, Wi-Fi passwords, Passkeys, and more.
Given the pullback in AAPL stock, it seems investors are unimpressed by Apple’s push into AI.
Compared to its big tech peers, Apple has underperformed in the last 12 months and was recently surpassed by Nividia as the second-largest company in terms of market cap.
CrowdStrike is Part of the S&P 500 Index
Companies including KKR, CrowdStrike, and GoDaddy were added to the S&P 500 index, driving share prices higher by 11%, 7.3%, and 1.9%, respectively.
All three companies will join the S&P 500 index on June 24th as part of the index’s quarterly rebalance.
Generally, stocks added to the S&P 500 index gain pace in the near term as institutional investors such as index funds buy the newly added stock to track the underlying index. The buying activity raises demand for shares, resulting in higher prices.
The inclusion of a stock in the popular index increases its liquidity, making it easier to buy and sell shares. Further, inclusion in an index such as the S&P 500 leads to investor recognition and elevated prices.
The three stocks leaving the index are Robert Half, Comerica, and Illumina, all of which declined yesterday. Shares of tech companies such as Dell and Palantir also fell amid disappointment that they were not added to the index.
Eli Lilly Surges to All-Time High
Shares of healthcare giant Eli Lilly hit a fresh record high on Monday after the U.S. Food and Drug Administration panel unanimously agreed its Alzheimer’s treatment was effective on patients in the early stages of the disease.
While the panel’s recommendations are non-binding, the agency typically follows its guidance.
Eli Lilly’s drug works to remove the buildup of beta-amyloid plaques in the brains of patients suffering from the fatal disease.
Valued at $822 billion by market cap, Eli Lilly is among the largest companies in the world. In the last 20 years, the stock has surged over 2,000% after adjusting for dividend reinvestments.
Headlines You Can't Miss!
Elon Musk may ban Apple devices from his companies over OpenAI partnership
EU might soon unveil tariff plans for Chinese EVs
Shares of computing firm Rasberry Pi surge on market debut
U.K. unemployment nears three-year high
Ripple launches new fund to drive blockchain adoption in Japan and Korea
Chart of The Day
U.S. government debt is up almost 50% since the onset of COVID-19.
The total government debt stands at $34.5 trillion, which is $11 trillion higher than in March 2020. As a portion of the U.S. economy, it is over 120%.
Meme of the Day
DISCLAIMER: None of this is financial advice. The newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own resear