THE S&P 500 ended a languid session slightly in the red on Monday, with investors standing by on news of a global minimum corporate tax rate, lingering inflation fears, and a lack of market-moving economic news.
The Dow Jones Industrial Average fell 126.15 points or 0.36% to 34,630.24; the S&P 500 lost 3.37 points or 0.08% at 4,226.52; and the Nasdaq Composite added 67.23 points or 0.49% at 13,881.72.
“Thematically, we’re done with earnings, so you have this lull in between earnings when what drives the market is economic data points,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. “There’s not a lot of impetus for investors to take action today.”
“There’s been this flip-flop between whether inflation will be transitory or persistent, and the next card that gets flipped over for that is the CPI report on Thursday,” Sroka added.
Small-cap stocks outperformed as the ongoing retail frenzy boosted stocks whose recent explosive trading volumes have been attributed to social media buzz.
AMC Entertainment Holdings jumped 14.8%, extending the previous week’s 85% gain.
Other so-called “meme stocks,” including GameStop Corp and US-listed shares of Blackberry Ltd advanced between 7% and 14%.
“You’ve seen a decades-long, technology-enabled democratisation of the market and there’s certainly groups of individual investors that flock to these ideas,” Sroka said. “We’re seeing speculative trading in an age of multiple outlets and social media amplifies the news.”
The Group of Seven (G7) advanced economies agreed on Saturday to back a minimum global corporate tax rate of at least 15%, a move Treasury Secretary Janet Yellen called a “significant, unprecedented commitment” to bring what she called a race to the bottom on global taxation.
Lawmakers in Washington are doubling down on efforts to craft a bipartisan infrastructure spending package, with House Democrats expected to bring a bill to vote as early as Wednesday.
Of the 11 major sectors in the S&P 500, seven lost ground, with materials suffering the largest percentage drop. Real estate led the gainers.
Advancing issues outnumbered decliners on the NYSE by a 1.35-to-1 ratio; on Nasdaq, a 1.82-to-1 ratio favoured advancers.
The S&P 500 posted 62 new 52-week highs and one new low; the Nasdaq Composite recorded 168 new highs and 21 new lows.
Volume on US exchanges was 10.52 billion shares compared with the 10.71 billion average over the last 20 trading days. – June 8, 2021
