Tech Keeps a Lid on US Stocks as Nvidia Tumbles: Markets Wrap

(Bloomberg) — Stocks kicked off the final week of June on the back foot as another selloff in Nvidia Corp. raised concern that the rally in big techs would be due for a breather.

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The company at the heart of the artificial-intelligence revolution extended its rout, sliding 9% in three days. A surge in demand for AI chips briefly made Nvidia the world’s largest company last week. The firm has also become the most-expensive stock in the S&P 500 Index, with its shares trading for roughly 23 times the company’s projected sales over the next 12 months.

Following a tech-led stock rally, Deutsche Bank strategists led by Binky Chadha say US equities are set to pause. There is a lot of good news baked into markets at the moment, and if that optimism proves unjustified there could be downside risks, Lori Calvasina at RBC Capital Markets told Bloomberg Television. The market continues to want to broaden out, but still struggles to do that, she noted.

“More broadly, last week saw some of the biggest inflows on record into large-cap tech/growth funds,” said Jonathan Krinsky at BTIG. “That feels like a sign of froth after the run we have had. We remain concerned about a near-term unwind of many year-to-date leaders. If the S&P 500 is going to avoid a bigger pullback into July, bulls need to see continued rotation below the surface.”

Corporate Highlights:

• Apple Inc.’s antitrust feud with the European Union over allegedly illegal practices on the App Store intensified as watchdogs issued a fresh warning that could lead to more fines — just months after they slapped the iPhone maker with a €1.8 billion ($1.9 billion) penalty for thwarting music-streaming rivals.

• Alnylam Pharmaceuticals Inc. shares soared after its drug succeeded in treating a progressive and deadly form of heart disease, potentially opening up a new avenue for the company’s top-selling product.

• GSK Plc has lost out to Pfizer Inc. on a contract to supply millions of doses of its blockbuster RSV vaccine to the UK in a setback for the local pharma giant.

• Sonoco Products Co. agreed to buy Eviosys, a maker of cans and other packaging, from KPS Capital Partners for about $3.9 billion.

• Eurofins Scientific SE plunged the most in more than two decades after the laboratory-testing company was targeted by Carson Block’s Muddy Waters Research.

• Online fashion retailer Shein confidentially filed papers with the UK authorities for a potential listing in London, according to people familiar with the matter.

• Tencent Holdings Ltd.’s Dungeon & Fighter Mobile more than doubled the sales of longstanding Chinese best-seller Honor of Kings in its first month, according to independent research, suggesting the online entertainment leader may have finally found a marquee franchise to replace aging titles.

Story continues

Key events this week:

• US Conference Board consumer confidence, Tuesday

• Fed’s Lisa Cook, Michelle Bowman speak, Tuesday

• US new home sales, Wednesday

• China industrial profits, Thursday

• Eurozone economic confidence, consumer confidence, Thursday

• US durable goods, initial jobless claims, GDP, Thursday

• Nike releases earnings, Thursday

• Japan Tokyo CPI, unemployment, industrial production, Friday

• US PCE inflation, spending and income, University of Michigan consumer sentiment, Friday

• Fed’s Thomas Barkin speak, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 was little changed as of 9:31 a.m. New York time

• The Nasdaq 100 fell 0.2%

• The Dow Jones Industrial Average rose 0.2%

• The Stoxx Europe 600 rose 0.5%

• The MSCI World Index rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index fell 0.3%

• The euro rose 0.4% to $1.0740

• The British pound rose 0.3% to $1.2682

• The Japanese yen rose 0.3% to 159.37 per dollar

Cryptocurrencies

• Bitcoin fell 3.8% to $61,271.57

• Ether fell 3.6% to $3,309.62

Bonds

• The yield on 10-year Treasuries was little changed at 4.25%

• Germany’s 10-year yield was little changed at 2.41%

• Britain’s 10-year yield was little changed at 4.07%

Commodities

• West Texas Intermediate crude was little changed

• Spot gold rose 0.4% to $2,332.04 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Vildana Hajric, Sujata Rao, Catherine Bosley and Matthew Burgess.

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