S&P500

Snapshot of major US stock indices on Wednesday:

• Dow +0.5%,
• NASDAQ +0.9%,
• S&P 500 +0.6%,
• S&P 500 6,263 in the range of 5,900 to 6,400.

The stock market began the day on a higher note yesterday, following NVIDIA (NVDA 162.88, +2.88, +1.80%), whose market capitalization surpassed $4 trillion.

The S&P 500 quickly encountered resistance near last week's highs but ultimately strengthened and moved confidently upwards in the afternoon, supported by falling interest rates. The two-year bond yield fell by five basis points to 3.86%, while the ten-year yield dropped by eight basis points to 4.34%. Any concerns about inflation that might have been linked to Trump's tariff letters sent this week were postponed. Market participants continued to act on the assumption that more favorable trade agreements would be made and that tariff measures would not result in an unacceptable level of inflation or a significant slowdown in economic growth.

As a result, the bullish trend on the market remained intact, driven by the tendency to buy on dips, leadership from large-cap stocks, and expanding buying interest.

Yesterday, NVIDIA led the rankings but did not show the largest growth among large-cap companies. That distinction went to Broadcom (AVGO 277.90, +6.10, +2.24%).

Other key growth contributors included Meta Platforms (META 732.78, +12.11, +1.68%), Amazon (AMZN 222.54, +3.18, +1.45%), Alphabet (GOOG 177.66, +2.50, +1.43%), and Microsoft (MSFT 503.51, +6.89, +1.39%), with the latter being upgraded from "Market Perform" to "Outperform" at Oppenheimer. Their results helped the Nasdaq Composite index reach a record high and kept the market-capitalization-weighted S&P 500 index in positive territory throughout the trading day.

Meanwhile, small-cap stocks had another strong day. The Russell 2000 index rose by 1.1%. Mid-cap stocks also showed growth, but the S&P Midcap 400 index saw a more modest increase of 0.5%. The drop in market rates contributed to this growth, providing a tailwind for growth stocks and additional momentum for interest-rate-sensitive stocks such as housing and utility stocks. Market breadth favored advancing stocks, with a ratio of approximately 8:5 on the NYSE and 7:4 on the Nasdaq.

The best-performing sector yesterday was the S&P 500 Utilities sector (+1.0%), followed by Information Technology (+0.9%), Communication Services (+0.9%), Industrials (+0.7%), and Consumer Discretionary (+0.7%).

The only sectors to lose ground were Real Estate (-0.02%), Energy (-0.5%), and Consumer Staples (-0.6%).

Notable news included Merck (MRK 83.71, +2.34, +2.88%) announcing it would acquire Verona Pharma (VRNA 104.77, +17.91, +20.62%) for $10 billion, a few smaller trade partners receiving tariff-related letters, a solid 10-year bond auction, and the publication of the FOMC meeting minutes from June 17-18, which reflected stronger expectations of rate cuts by year-end rather than no cuts at all.

Year-to-date performance

• Nasdaq: +6.7%
• S&P 500: +6.5%
• DJIA: +4.5%
• S&P 400: +2.0%
• Russell 2000: +1.0%

Economic calendar MBA Mortgage Applications Index: +9.4% (previous: +2.7%) Wholesale Inventories for May: -0.3% (consensus: -0.3%) after a downwardly revised growth of 0.1% (from 0.2%) in April.

Energy market Brent oil is now trading at $70.20. Oil remains just above $70, supported in part by some easing of fears regarding Trump's tariffs, which are largely not as dire as initially promised.

Conclusion The US stock market maintains its bullish trend and has not yet shown a normal correction. We are awaiting such a correction for new buying opportunities.