The Dow Jones Industrial Average outperformed the broader market on Monday as Wall Street's recent tech rally continues to cool as big tech names trade around record highs. The 30-stock average rose over 260 points, with the S&P 500 Index and Nasdaq Composite fell 0.3% and 1%, respectively.
Here's how the market settled on Monday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
In Focus:
The information technology sector was the weakness on the S&P 500 on Monday, declining more than 2% as market participants sold off growth names at their highs in favor of sectors like energy and financials, which rose 2.7% and about 1%, respectively. Monday's session of the tech-heavy Nasdaq's worst day since April.
Bank of America analyst Chintan Kotecha said in a note to clients that commodity trading advisors (CTA), who heavily operate in futures trading, could quickly sell tech stocks as the sector continues to show more signs of weakness in recent sessions.
"According to our models, CTAs are likely now back to very stretched levels of long positioning in NASDAQ-100 futures. With positioning at these levels, stop loss triggers become tighter and with the last two days' declines our models estimate pressure fro CTA unwinds starting at levels 2.8% lower from Friday's close," Kotecha said in a note.
Federal Reserve Watch:
San Francisco Fed President Mary Daly said in remarks in her home district on Monday that while the central bank has made progress towards its goal of bringing inflation down to its 2% target, "we need to finish the job," in terms of monetary policy.
"We need to be ready to respond to however the economy evolves," Daly said, highlighting how the economy could take many roads to recovery. These include a slow decline in inflation spurring the need for higher-for-longer interest rates, a fast inflation comedown which would require interest rate cuts, of a gradual decrease alongside a "rebalancing in the labor market," which would call for a normalization of policy over time.
In the News:
RXO
"This acquisition will provide RXO with both immediate and long-term opportunities for revenue and earnings growth and will generate significant returns for shareholders," RXO CEO Drew Wilkerson said in a statement.
Shares of ResMed
Apple
Novo Nordisk
For Tuesday:
Market participants will turn their attention towards more Fedspeak as well as data on consumer confidence for June on Tuesday.