Megacaps Apple and Microsoft pared losses to gain 0.3% and 0.9%, respectively. AI chip leader Nvidia hit a new record high with a 1% gain.
Other chip stocks also rose, pushing the Philadelphia SE Semiconductor Index to an all-time high. U.S.-listed shares of Broadcom and Taiwan Semiconductor Manufacturing Co rose about 3%, while Micron Technology jumped 2% after brokerages raised price-targets.
Autodesk shares jumped 4.5% after a report said activist investor Starboard Value has bought a stake in the software maker worth about $500 million.
Technology was the biggest gainer among the 11 S&P 500 sector indexes.
The blue-chip Dow was the only major index to post a weekly decline Friday, while the Nasdaq notched its fifth consecutive record high. The S&P 500 hit multiple all-time peaks last week.
However, some investors are concerned about the sustainability of the equity rally, as megacap growth and technology stocks were behind most of Wall Street’s gains this year.
“There’s really no desire to be a true seller at this point because the belief is that the momentum will continue, and stocks will continue to rise,” said Daniela Hathorn, senior market analyst at Capital.com.
“The fact that this rally has been driven largely by a select few stocks means the decline could be even deeper.”
Goldman Sachs has raised its end-2024 target for the S&P 500 index to 5,600 from 5,200, about 3.2% higher than current levels.
Markets are also keeping a close eye on upcoming comments from the New York Fed’s John Williams, the Philadelphia Fed’s Patrick Harker and Fed Board Governor Lisa Cook.
The New York Fed’s Empire State Current Business Conditions index fell less than expected, while the prices paid index eased slightly, the data showed.
The rest of the week’s economic roster includes May retail sales data on Tuesday, and industrial production, housing starts and the S&P Flash PMI data later in the week.
The Federal Reserve’s recent hawkish projections have come in somewhat of a contradiction to a number of data releases that pointed to growing weakness in the economy. On Wednesday, the central bank lowered its forecast of three rate cuts in 2024 to just one.
However, according to LSEG data, the market still expects two 25 basis point rate cuts this year. The CME FedWatch tool shows that the start of easing is still seen at the September meeting.
At 9:47 a.m. Eastern time, the Dow Jones Industrial Average was down 91.66 points, or 0.24%, at 38,497.50, the S&P 500 was down 5.63 points, or 0.10%, at 5,425.97, and the Nasdaq Composite was down 17.42 points, or 0.10%, at 17,671.46.
The trading week will be shorter as the markets will be closed on Wednesday.
Declining issues outnumbered advancing ones by a 1.73-to-1 ratio on the NYSE and 1.55-to-1 on the Nasdaq.
The S&P index recorded 13 new 52-week highs and four new lows, while the Nasdaq recorded 20 new highs and 82 new lows.
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