Closing Bell: S&P 500 Ekes Out Gain Under Tech Pressure, Middle East Tensions
The S&P 500 moved modestly higher, despite pressure on tech stocks, as a Middle East ceasefire appeared to show progress.
The benchmark price for U.S. crude oil sank 3% to roughly $93 per barrel, serving as an inflationary relief lever for transport, manufacturing and energy-intensive industries. Aerospace and Defense, Machinery, and Healthcare companies showed strength.
The S&P 500 rose 0.41% to 7584.31, while the small-cap Russell 2000 was up 1.45% after hitting an all-time high intra-day high. The tech-heavy Nasdaq 100 slipped 0.53% to 30,407.81. The Dow Jones Industrial Average jumped 1.73% to a new record high of 51561.93. The Philadelphia Semiconductor Index (SOX) slipped by 2.1%.
Reflecting on a sell-off in Broadcom (AVGO) shares Thursday following a solid earnings report that none-the-less disappointed analysts and traders, Dave Nicholson, Chief Technology Advisor at The Futurum Group, told Marley Kayden, “The reality of the AI space, from a semiconductor perspective [is] massive growth ahead. However, …. market expectations have grown right into that. And anything less than ‘better than perfection’ is going to be punished by the market.”
Five things to watch from Thursday’s market
- Lululemon (LULU), trading at seven-year lows, slipped nearly 10% in after-hours trading after lowering its sales guidance for fiscal 2026 between $11.0B to $11.15B, down from the previous estimate of $11.35B to $11.5B. The new range is well below the $11.46B Street expectation. Otherwise, the apparel retailer reported quarterly earnings of $1.69 per share, ahead of the $1.67 analysts expected. Sales also were better than expected. The Lululemon turnaround includes a new CEO and an agreement with the former leader.
- Broadcom's 12.6% decline weighed on the S&P 500 and Nasdaq-100 Thursday, and many stocks tied to the AI trade followed Broadcom to the downside. The company reiterated its fiscal 2027 AI revenue outlook, which fell short of a high bar set by many analysts. However, markets regained momentum throughout the day. This reversal was seen clearly in the SOX, which started the day down 5% before paring losses.
- Ciena (CIEN) was the biggest S&P decliner Thursday, down 13.7%. Its 40% revenue growth in its latest quarter was strong, but orders showed weakness. The company’s guidance for fiscal year revenue of $6.3B is the top of its previous guidance range.
- Amazon (AMZN) and Alphabet (GOOGL) announced new cloud deals with Pinterest (PINS) and IBM Corp. (IBM), respectively. Alphabet rallied 3.7% while Amazon was up 1.5%.
- Tech’s pain was healthcare’s gain. The health sector was the biggest outperformer of the session, rallying 3.2% thanks in large part to the 5% rise in UnitedHealth’s (UNH) shares. Investors gained confidence as price targets moved higher: Bank of America upgraded UNH stock to buy from neutral with a price target hike to $450 from $420. Morgan Stanley raised its UNH target to $453 from $395.
Economic Events/Data, Friday, June 5 (ET)
08:30AM: Nonfarm Payrolls (May)
08:30AM: Unemployment Rate (May)
08:30AM: Average Hourly Earnings (MoM)
08:30AM: Average Hourly Earnings (YoY)
08:30AM: Participation Rate (May)
01:00PM: Baker Hughes Rig Count
Earnings Calendar, Friday, June 5 (ET)
Premarket: ABM Industries (ABM), G-III Apparel Group (GIII)
Postmarket: None
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