U.S. stocks drift lower as New York Fed index jumps
U.S. stocks were mostly lower by midday Monday, while the New York Fed’s Empire State Manufacturing Index rose to 20.6 in August from 15.6, above the 11 consensus.
S. stocks drifted lower at midday Monday as a violent melt-up in AI optical and memory names collided with a bond market that refuses to settle down, leaving the S&P 500 a whisker below Friday’s close after last week’s record. S. equity markets by midday Monday, losses were shallow but broad, with only three of eleven S&P 500 sectors holding gains.
93. 3%, to 53,560. The Nasdaq 100 was effectively flat at 30,033, propped up by chips and memory names. 3% to 3,059.
Shares of SanDisk Corp. (NASDAQ: SNDK ) rallied by 10%, extending a powerful 35% rally from the previous week. Micron Technology Inc. (NASDAQ: MU ) also jumped 6%, amid a bullish note from Bank of America.
Commerce Secretary Howard Lutnick said the administration is “not in favor” of Apple sourcing DRAM and NAND from Chinese suppliers ChangXin Memory Technologies and Yangtze Memory Technologies, fueling a broad-based rally across the sector. The Roundhill Memory ETF (NYSE: DRAM ) was up 7% in the session. The real action was in the long end of the curve. 75% tested last week.
29%, a fresh 19-year peak. Rate-hike odds, by contrast, kept fading. Fed Chair Kevin Warsh ‘s suggestion that a hike may not be his preferred tool against higher prices has taken the sting out of front-end pricing, and the dollar softened accordingly ahead of Wednesday’s FOMC minutes from a meeting that produced three dissents. The data ran hot.
6, blowing past the 11 consensus and marking the fastest expansion since late 2021. Fading rate-hike bets lit up precious metals. 37, lifting the SPDR Gold Shares (NYSE: GLD ). 2%.
3%. 0%. 3%. 6% gain, matched by the Energy Select Sector SPDR Fund (NYSE: XLE ).
5%. 0% as long yields bit, while the Industrials Select Sector SPDR Fund (NYSE: XLI ) and the Health Care Select Sector SPDR Fund (NYSE: XLV ) clung to small gains. Industry ETFs told the rotation story more bluntly. 8%.
3%. The session’s dominant trade was AI optical interconnect and memory. 5 billion in second-quarter revenue and is meeting with banks about what could be the largest IPO on record reinforced the view that datacenter capital expenditure has years to run. Coherent Corp.
63, still riding its Aug. 12 fiscal fourth-quarter beat on both revenue and EPS, plus above-consensus guidance. Jefferies, Morgan Stanley and Rosenblatt have all raised price targets since the print, one as high as $500, and Needham initiated coverage with a Buy. A reported FCC proposal to ban Chinese optical transceiver imports positions Coherent as a domestic beneficiary.
Semtech Corp. 6T optical module shipments, adoption of its CopperEdge ACC cables by a major cloud customer and growing LoRa+ demand. Credo Technology Group Holding Ltd. 31, trading purely on read-through from the same AI connectivity demand narrative.
The theme extended well beyond the leaderboard. Lumentum Holdings Inc. 01 billion and CEO Michael Hurlston said pump-laser shipments were up 80% year over year and effectively sold out. Marvell Technology Inc.
0%, and Ciena Corp. 5%, both on Lumentum read-through, with Marvell not due to report until Aug. 28. Corning Inc.
4%. The damage was concentrated in restaurants, beverages, cable and mortgage finance. Wingstop Inc. 58.
5%. UWM Holdings Corp. 0%, extending the derating that followed its Aug. 05 billion capital partnership with the Ishbia family and Oaktree Capital Management, as well as the suspension of its common dividend to prioritize debt reduction.
Constellation Brands Inc. 9% to