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Stock Market News: Why Tech Stocks Fell After the Cool Inflation Report
股市新闻：为什么科技股在通胀报告后下跌
The S&P 500 and Nasdaq slid. The Dow edged higher.
标普 500 指数和纳斯达克指数下滑。道琼斯指数微涨。
Last Updated: 最后更新时间：
11 July 2024 at 8:28 PM GMT-4
2024 年 7 月 11 日晚上 8:28 格林尼治标准时间-4
What to Watch Today 今日关注内容
Thursday was a nightmare trading session for tech investors.
周四对科技投资者来说是一场噩梦般的交易日。
The Magnificent Seven may have driven the market for the last two years, but it did the opposite today. The biggest laggards were Meta Platforms, down 4.1%, Nvidia down 5.6%, and Tesla down 8.4%.
辉煌的七巨头可能在过去两年推动了市场，但今天却出现了相反的情况。表现最糟糕的是 Meta Platforms，下跌 4.1%，Nvidia 下跌 5.6%，特斯拉下跌 8.4%。
Average stocks were doing fine—the Invesco S&P 500 Equal Weight ETF was up 1.2%.
平均股票表现良好——Invesco 标普 500 等权重 ETF 上涨了 1.2%。
Bonds, meanwhile, were rallying after the latest CPI report came in cooler-than-expected.
债券在最新的消费者价格指数报告出乎预料地较为温和后出现了反弹。
Traders appeared to be selling winners, betting lower inflation could usher in interest-rate cuts that would benefit underperforming stocks.
交易员似乎在卖出赢家，押注较低的通胀可能会引发降息，从而使表现不佳的股票受益。
Key Events 关键事件
7 hours ago
Latest Updates 最新更新
A cooler-than-expected inflation report had traders fleeing technology stocks and piling into smallcaps.
一份低于预期的通胀报告导致交易员纷纷抛售科技股，并涌入小盘股。
The Russell 2000 surged 3.7%, while the Nasdaq Composite sank 2%. The S&P 500 fell 0.9% as it was weighed down by large technology stocks. The Dow Jones Industrial Average finally benefitted from its relative lack of tech by rising 32 points, or 0.1%.
罗素 2000 指数大涨 3.7%，纳斯达克综合指数下跌 2%。标普 500 指数下跌 0.9%，受大型科技股拖累。道琼斯工业平均指数由于相对缺乏科技股的影响，最终上涨 32 点，涨幅为 0.1%。
The yield on the 2-year Treasury note fell to 4.503%. The 10-year yield fell to 4.192%.
The consumer price index fell 0.1% in June from May. Prices rose at 3% annual rate, which came in cooler than expected. Traders are now increasingly betting on a September interest rate cut.
Stocks that could benefit from lower rates in the real estate, utilities, and materials sectors rallied. Technology and communication services sank as all members of the so-called Magnificent Seven group of megacap stocks fell.
Because the Mag 7 includes the biggest stocks like Apple, Microsoft, and Nvidia, its declines can weigh down the S&P 500. The Invesco S&P 500 Equal Weight ETF, which gives every S&P 500 stock the same weight, rose 1.3%.
Big banks kick off earnings season tomorrow, but traders shouldn't sleep on the producer price index, either.
Treasury yields fall back to March levels after soft June inflation data compounded with a more dovish-sounding Chair Powell and last week's unemployment uptick.
国债收益率在 6 月通胀数据疲软、鲍威尔主席讲话更为鸽派以及上周失业率上升后回落至 3 月水平。
Markets are more convinced that interest-rate cuts could start in September and up to three cuts this year are priced in, CME data shows.
市场更加确信利率可能会在 9 月开始下调，根据芝加哥商品交易所的数据，今年可能会有最多三次降息。
June core 12-month inflation slowed slightly to 3.3% from 3.4%. A Wall Street Journal survey points to June PPI inflation, due Friday, accelerating a bit. The all-important PCE data is due July 26.
Thursday, the 10-year falls 0.087 percentage point, to 4.192, and the two-year loses 0.127 p.p., to 4.503%.
Oil futures rise for a second straight session as a below-estimate U.S. inflation reading is seen raising the chances of a September interest-rate cut by the Fed.
油价期货连续第二个交易日上涨，因为美国通胀数据低于预期，可能增加联邦储备委员会在九月降息的可能性。
"Although we have difficulty connecting a possible rate reduction with increased petroleum demand, favorable news on the inflation front would appear sufficient to maintain speculative interest in the long side of the energy futures," Ritterbusch says in a note.
“尽管我们很难将可能的利率降低与石油需求增加联系起来，但通胀前景的有利消息似乎足以维持对能源期货多头的投机兴趣，”里特布什在一份备忘录中说道。
The IEA made minor changes in its demand growth outlook, raising the 2024 estimate by 10,000 barrels a day while cutting its 2025 forecast by 20,000 b/d.
WTI settles up 0.6% at $82.62 a barrel and Brent rises 0.4% to $85.40 a barrel.
A major rotation is taking place on Thursday. Many of the biggest winners of the past couple years are struggling while the laggards are having their day in the sun.
The consumer price index for June came in cooler-than-expected. It has traders betting that interest rates are coming down sooner rather than later. The yield on the 10-year Treasury note was down to 4.2%.
Falling yields breathed fresh life into underperforming smallcaps and rate-sensitive sectors.
The Russell 2000 index is up 3.4%, beating the Nasdaq Composite by 5.26 percentage points. Going back to 1986, the largest one-day outperformance by the Russell 2000 over the Nasdaq was 5.23 percentage points on Nov. 9, 2020, according to Dow Jones Market Data.
The Magnificent Seven—a much-watched group of large tech firms that consists of Apple, Amazon.com, Alphabet, Nvidia, Tesla, Microsoft, and Meta Platforms—was on track to shed a combined $623 billion in market cap, according to Dow Jones Market Data. That would be the largest market cap decline for the Mag 7 since Meta went public in 2012.
The S&P 500’s technology and communication services sectors were down 2.7%, followed by consumer discretionary with a decline of 1.7%.
Though growth-oriented technology stocks often rally in the wake of falling long-term rates because higher rates lower the value of future cash flows, technology stocks are pricey these days and smallcaps are not.
“It was almost sort of getting feverish just how relentlessly these stocks were rising,” Sevens Report Research’s Tom Essaye tells Barron’s. “I think this will cause a bit of a correction, and a bit of a widening. How long it lasts depends on growth.”
Essaye says traders are looking at the prospect of lower rates and noting small caps, utilities, and real estate investment trusts are both cheap and could benefit from lower rates.
If the rotation has legs, real estate, utilities, and materials could keep rallying, along with the broader Russell 2000.
Big tech stocks like Nvidia, Apple, and Microsoft were supposed to be invincible, invulnerable, omnipotent. It turns out they are subject to the whims of market forces just like every other company out there.
By now, we all know that the S&P 500's great year has been driven by Big Tech. But it's worse than just that. Just 20% of the stocks in the S&P 500 have outperformed the index this year, a record low according to Torsten Slok, chief economist at Apollo Global Management. That has meant that investors either have had to buy Apple, Nvidia, Microsoft, and the rest, or be content with low single-digit returns.
The scolds, of course, have been saying, "Just you wait," and sounding like sore losers because of it. The argument was never about fundamentals—those haven't changed. Instead, they argued that the market had gotten too concentrated, too tech-heavy for it to keep rising the way it has been. And yet the stocks just kept going up.
Today, the scolds look less like cranks. Apple is down 2.3%, Microsoft 2.6%, Amazon.com 2.7%, and Alphabet 2.9%. Meta Platforms, meanwhile, has dropped 4.1%, Nvidia has slid 4.6%, and Tesla, which delayed its Robotaxi event, has slumped 6.4%.
The average stock, though, is doing just fine. In the S&P 500, 392 constituents are higher and just 111 are lower (some companies have more than one share class). The Invesco S&P Equal Weight ETF is up 1.1%. It's just Big Tech and other top performers that are feeling the pain.
Perhaps tomorrow investors will go back to doing what they've done in recent years and buy the dip. But there will come a time when the slump is more prolonged—and more painful.
Let's just hope that time isn't now.
The Dow was wavering as Thursday’s rotation away from tech weighed on even the blue-chip index.
The Dow briefly turned lower and was up just 24 points, or less than 0.1%, despite 19 of its 30 stocks trading higher. As traders bet on laggards and took profits in the tech sector, the worst Dow performers were Intel, Amazon.com, Microsoft, and Apple.
The S&P 500 was down 0.9% even though about 400 of its stocks were rising. Its tech sector was down about 2.4%, while communication services were down 1.4%. The Nasdaq Composite was down 1.9%.
Bonds were rallying in the wake of a cooler-than-expected consumer price index and some dovish comments from San Francisco Federal Reserve President Mary Daly. The yield on the 10-year Treasury note was down to 4.187% from a high of 4.301% earlier in the morning.
After the S&P 500 and Nasdaq Composite rallied to record levels leading into the report, traders were selling what worked and hoping the laggards will play catch up in the months ahead.
8 hours ago
8 hours ago
Oil prices rise as a slowdown in U.S. inflation raised hopes for interest-rate cuts.
Brent crude is up 0.5% to $85.50 a barrel, while WTI gains 0.6% to $82.58 a barrel.
U.S. Consumer Price Index inflation slowed from 3.3% to 3.0% on year in June, beating market expectations of 3.1% and boosting hopes of a U.S. interest-rate cut sooner rather than later.
Oil prices tend to rise as interest rates fall, as the dollar is pushed down and consumer demand for energy rises on the availability of cheaper credit.
Signs of strong demand in the U.S. also benefited prices, with inventories declining by 3.4 million barrels last week, while the Organization of the Petroleum Exporting Countries kept its bullish outlook for oil-demand growth unchanged on Wednesday.
