The U.S. stock market opened June with a mixed performance. The S&P 500 edged up slightly (0.1%) after a late rally, while the Nasdaq Composite gained 0.6%, snapping a losing streak. However, the Dow Jones Industrial Average dipped 0.3%. This follows strong gains in May, with all three major indexes rising over 2.3%.
Recent market volatility reflects concerns about a slowing U.S. economy. Data released on Monday showed a sharper-than-expected contraction in the manufacturing sector. This, coupled with falling oil prices (despite production cuts by OPEC+), has some investors feeling cautious.
“There are signs of weakness in the data that might make people nervous,” said Kathryn Kaminski, a strategist at AlphaSimplex.
Meme stocks, however, bucked the trend. GameStop surged 21% after a social media post linked to a prominent meme-stock investor. AMC Entertainment also saw an 11% gain.
On the positive side, Nvidia climbed 4.9% after an analyst upgrade. Overall, the S&P 500 is up 11% for the year so far.
A key factor driving the market rally has been the expectation of interest rate cuts by the Federal Reserve in 2024. However, some investors worry that a more severe economic downturn could trigger these cuts, leading to a stock sell-off.
The Fed is scheduled to meet next week, but no change in interest rates is anticipated. Investors will be looking ahead to the May jobs report on Friday for further clues about the economy’s health. Economists predict the addition of around 190,000 jobs for the month.
Despite the recent market gains, some experts remain cautious about the possibility of a recession. “We’re not out of the woods yet,” said John Goltermann, an investment officer at Townsend & Associates.
The bond market also saw some movement, with the 10-year Treasury yield declining for the third consecutive day.