4:05pm: Amazon shares up after stock split
The Dow closed Monday up 15 points, less than 0.1%, at 32,914, the Nasdaq added 49 points, 0.4%, to 12,061 and the S&P 500 improved 13 points, 0.3%, to 4,121.
The blue-chip index fell briefly into the red Monday afternoon after being up more than 300 points earlier in the session.
Traders are still keeping a close eye on the Fed and any potential interest rate increases.
“For now, the market sees a Federal Reserve trying to navigate a painful and bumpy road, yet trying to find a soft exit,” LPL Financial Chief Equity Strategist Quincy Krosby said, as reported by CNBC. “And the market finds itself between wanting to believe in the rallies but not believing that the Fed can negotiate a soft landing.”
Meanwhile, Amazon.com Inc (NASDAQ:AMZN) shares climbed 2% to $124.79 following a 20:1 stock split.
12.05pm: Rebound continues at noon
US stocks remained in positive territory at noon in a rebound attempt after last week’s decline off the back of stronger-than-expected jobs data.
At midday, the Dow had added 104 points at 33,003 points.
The S&P 500 was up 22 points at 4,131 points and the Nasdaq had gained 57 points at 12,070 points.
IG chief market analyst Chris Beauchamp said it looked like investors were having another go at extending the rally in equity markets on both sides of the Atlantic.
“Such renewed strength after what was ultimately an indecisive end to May will provide some comfort for investors, but with oil surging again the spectre of inflation and rate hikes is never far away,” he said.
CMC Markets UK chief market analyst Michael Hewson noted that Chinese tech shares had undergone a decent bounce as the country’s COVID-19 restrictions relax, notably Alibaba, JD.com, TenCent and Didi Global.
“After slipping back in the aftermath of Friday’s payrolls report, US markets have opened higher, taking their cues from the more positive tone in Asia and European markets today,” Hewson said.
Meanwhile, Twitter Inc (NYSE:TWTR) has dipped about 3% following the news that Tesla Inc (NASDAQ:TSLA) CEO Elon Musk’s $44 billion deal to purchase the social media company is on the rocks.
In a letter sent to Twitter this morning, Musk claimed that the company has failed to provide him with information on the platform’s spam bot problem which he says he is entitled to under the deal.
10:50am: Proactive North America headlines:
China's Didi surges 50% after regulators reportedly end probe into ride-hailing major
Tiidal Gaming says it has been nominated for the 'eSports product of the year' award at the 2022 SiGMA/AGS Awards Americas
Infield Minerals wins drilling permit and retains drilling contractor for upcoming campaign at Desperado
Québec Nickel posts follow-up assay results from Fortin Sill target at Ducros project
Aftermath Silver (TSX-V:AAG) reveals new batch of high-grade silver and copper assays from Berenguela project in Peru
Goldshore Resources says its drill program has extended the resource at Moss Lake gold project
ACME Lithium kicks off drilling at Clayton Valley Nevada lithium brine project
Jushi Holdings opens 33rd retail location nationwide and fourth dispensary in Nevada
Medallion Resources announces appointment of new CFO in preparation for Nasdaq listing
Champion Gaming (TSX-V:WAGR) announces management and board changes
Lavras Gold achieves million ounce milestone for LDS project in Brazil with Cerrito prospect resource
Willow Biosciences incorporates Inscripta’s digital genome engineering platform into its strain workflows
NioCorp says process enhancements to critical minerals project plans point to possible cost reductions and lower emissions
Gevo enters into partner agreement with Google Cloud to measure and verify the efficacy of next-generation biofuels; launches $150M registered direct offering
Vox Royalty (TSX-V:VOX) acquires rights to three Canadian gold royalties for up to C$1.8M
African Gold Group says preparations for ASX listing are progressing well
Graphene Manufacturing Group announces changes to leadership team and Technical Advisory Committee
HighGold (TSX-V:HIGH, OTCQX:HGGOF) Mining seeing potential for bulk tonnage gold at Argus Zone in Munro-Croesus project
Victory Square Technologies announces 2021 results; says NAV increased to $102M from $51M in 2020
ReVolve Renewable Power announces signing of land option agreements adjacent to Presa Nueva Wind project in Mexico
9.35am: US stocks rise at the open
US stocks opened higher on Monday however volatile trading is expected to continue after a stronger-than-expected May jobs report released last week has reiterated the need for further action by the Fed to ease inflationary pressures.
Just after the open, the Dow had gained 170 points at 33,070 points.
The S&P 500 was up 35 points at 4,143 points and the Nasdaq had jumped 141 points at 12,154 points.
After its 20-for-1 stock split took effect this morning, Amazon.com Inc (NASDAQ:AMZN)’s stock was up 2%, trading at about $125 per share.
DiDi Global Inc's shares had also spiked about 50% after reports that Chinese regulators were preparing to wrap up their investigation into the ride-share company.
6.30am: Roller coaster ride continuing
US markets were expected to open higher on Monday, clawing back some of their recent losses as investors digest the US non-farm payrolls report from last Friday and look to US inflation data due out at the end of this trading week.
While higher closes in key Asian stock markets are also expected to lift sentiment, concerns over price pressures and the specter of rising interest rates are likely to make for volatile trading.
Futures for the Dow Jones Industrial Average gained 0.60% in pre-market trading, while those for the broader S&P 500 index rose 1.0%, and contracts for the Nasdaq-100 were up 1.4%.
“There is no doubt that the US stock market has been through a major roller coaster that pushed the S&P 500 briefly into a bear market territory as it plunged over 20% from its recent high last month," Naeem Aslam, chief market analyst at avatrade.com said. “However, the index bounced back quickly from those lows, and the question for investors and traders is if the current upward momentum in the stock is in a dead cat bounce phase or if this rally will continue.”
For Aslam, the answer would depend on the US CPI reading, due on Friday, with traders expecting the US data to show signs that inflation has peaked.
“What smart money is more focused on is how long it will take for inflation to go back to its normal level or even close enough to the Fed's target of 2%. Until we begin to see a big improvement in the US CPI number, it is immensely difficult to think that bulls are out of the woods,” Aslam argued.
Last Friday, US labor market data showed continued strength with total non-farm payroll employment rising by 390,000 in May, exceeding consensus estimates. While the strength of the data helped improve sentiment, trimming stock price losses, sentiment remains fragile as investors worry that aggressive rate hikes by the US Fed will weigh heavily on economic growth and dent corporate bottom lines.
Those concerns could become the theme this week too as traders believe that the Fed is increasing interest rates at a time of economic weakness, derailing economic recovery and pushing the world’s biggest economy towards stagflation, said Aslam.
“Remember, the US ADP (jobs) number on Thursday confirmed a horrible reading, and this means that the private sector is in for a rough ride. In addition to this, we have poster children like Elon Musk and Jamie Dimon talking about serious threats of a recession taking place. In this environment, it is extremely difficult for traders to hold and maintain an optimistic view,” added Aslam.
In energy markets, WTI crude oil futures added 0.6% to $119.57 a barrel and Brent crude futures gained 0.6% to $120.42.
Contact the author at jon.hopkins@proactiveinvestors.com