U.S. stock markets showed mixed performance on Monday, with the Dow Jones Industrial Average rising 148 points or 0.29% to close at 51712, while the S&P 500 fell 27 points or 0.37% to 7472 and the Nasdaq Composite dropped 351 points or 1.32% to 26166. The divergence came as declining oil prices supported overall market sentiment, but technology stocks faced selling pressure ahead of memory chip giant Micron's earnings report scheduled for Wednesday after market close. Hong Kong's Hang Seng Index continued its losing streak for a fourth consecutive trading day, closing down 156 points at 23768 despite strength in external markets, with volume reaching HK$348.6 billion. Morgan Stanley strategist Michael Wilson warned that liquidity shortages pose a greater threat to equities than potential interest rate increases and may continue pressuring markets in July, while JPMorgan strategist Mislav Matejka expressed optimism for consumer stocks in the second half of the year.
Dow Gains 148 Points While Nasdaq Falls 1.32% on Monday
The Dow Jones Industrial Average opened down 9 points on Monday before reversing course to climb as much as 323 points, reaching an intraday high of 51887. The index ultimately closed with gains of 148 points or 0.29% at 51712. The S&P 500 and Nasdaq Composite traded lower throughout the session, with the S&P 500 declining 27 points or 0.37% to 7472 and the Nasdaq falling 351 points or 1.32% to 26166. International oil prices continued to decline, which supported overall market sentiment.
SpaceX Drops 16.4% Erasing $400 Billion in Market Value
SpaceX shares fell for a third consecutive trading day, plunging 16.4% and wiping out $400 billion in market capitalization in a single session. The stock closed below $160 after failing to hold above the $190 level. The company issued debt shortly after going public, stating the proceeds would be used to repay existing debt. Alphabet's Google saw its stock drop 5% after John Jumper, a senior research scientist at Google DeepMind, moved to Anthropic. The stock fell below $360 at the market open.
Micron Rises 6.8% After Analysts Raise Price Targets
Micron Technology shares climbed 6.8% to $1211.38 after brokerage firms Bernstein and Needham raised their price targets to $1300 and $1550 respectively. The stock reached $1245 in after-hours trading, setting a new high. Micron is scheduled to report earnings on Wednesday after market close.
Morgan Stanley Warns Liquidity Shortage Threatens Stocks
Morgan Stanley strategist Michael Wilson stated that equity markets currently face a liquidity shortage that poses a greater threat than potential interest rate increases. Wilson indicated this liquidity challenge may continue to negatively impact stocks in July, noting that the Federal Reserve's balance sheet support is diminishing while lending growth is accelerating. JPMorgan strategist Mislav Matejka expressed a bullish view on consumer stocks, stating that undervalued consumer equities could rebound in the second half of the year. Matejka noted that consumer stock valuations are not expensive and global consumer indicators are near record lows, with expectations for improvement. The strategist anticipates easing geopolitical tensions, improved oil price outlook, and favorable interest rate conditions in the second half. JPMorgan favors luxury goods, airlines, hotels, travel and leisure, and retail stocks.
Hang Seng Falls to 23768 Extending Four-Day Decline
The Hang Seng Index opened down 113 points on Monday and extended losses to 479 points, reaching an intraday low of 23444, the lowest level of the year. The index later pared losses to close down 156 points at 23768, marking a fourth consecutive trading day of declines. Trading volume increased to HK$348.6 billion. The index fell while external markets and mainland Chinese stocks advanced. The following trading day, the Hang Seng opened up 31 points at 23800 and briefly reached 23825, gaining 57 points, before reversing to fall as much as 331 points to an intraday low of 23437.
FAQ
What caused the Nasdaq to fall 1.32% on Monday while the Dow rose?
The Nasdaq Composite dropped 351 points or 1.32% to 26166 on Monday due to weakness in technology stocks, including a 16.4% decline in SpaceX and a 5% drop in Alphabet's Google after a key DeepMind scientist moved to Anthropic. The Dow Jones Industrial Average rose 148 points or 0.29% to 51712, supported by declining international oil prices which improved overall market sentiment.
Why did Morgan Stanley warn about liquidity risks in July?
Morgan Stanley strategist Michael Wilson stated that equity markets face a liquidity shortage that poses a greater threat than potential interest rate increases and may continue pressuring stocks in July. Wilson noted that the Federal Reserve's balance sheet support is diminishing while lending growth is accelerating, creating liquidity challenges for the market.
What level did the Hang Seng Index reach as its year low?
The Hang Seng Index reached an intraday low of 23444 on Monday, marking the lowest level of the year. The index ultimately closed at 23768, down 156 points, extending its losing streak to four consecutive trading days with volume of HK$348.6 billion.
