The Nasdaq Reached a Record Start to the Week

Technology stocks propelled the Nasdaq Composite to a new high on Monday, as investors remained optimistic about the resilience of U.S. consumers and the potential for interest-rate cuts.

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The tech-heavy Nasdaq Composite climbed 0.7% to 16,794.87, surpassing its previous record set on Wednesday after a Labor Department report indicated easing inflation in April. The S&P 500, which had been trading at record levels before a late-session dip, ended up 0.1%. Meanwhile, the Dow Jones Industrial Average fell by 0.5%, or approximately 197 points, from Friday’s record close.

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Norwegian Cruise Line Holdings surged 7.6%, leading the S&P 500 higher after raising its profit forecast for the year. Executives delivered an optimistic presentation at the New York Stock Exchange, boosting shares of rivals Royal Caribbean and Carnival by 4.1% and 7.3%, respectively.

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Mark Kempa, Norwegian’s finance chief, noted that their affluent customers are booking trips well in advance and spending significantly during their voyages. "Cruise lines are a leading indicator," he said. "Consumers are strong."

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Investors are keenly anticipating consumer spending data on Tuesday, with quarterly results from retailers such as Lowe’s, Macy’s, AutoZone, and Urban Outfitters expected to provide further insights.

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“The U.S. consumer is paramount in determining the direction of the market,” said Nathan Kotler, head of trading at investment manager GenTrust. He pointed out that while high interest rates are benefiting wealthier consumers by yielding returns on savings, they are also straining lower-income Americans who have exhausted their pandemic savings.

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Joe Salmond, portfolio manager at Thornburg Investment Management, expressed caution regarding consumer resilience. “I don’t know how much is left in the consumer at this point,” he said.

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On Wednesday, investors will receive updates on existing-home sales and review minutes from the Federal Open Market Committee's recent meeting for indications on future interest rate policies.

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The yield on the benchmark 10-year Treasury note rose to 4.436%, up from 4.419% on Friday.

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Nvidia, a key player in the artificial intelligence sector, is set to report its latest earnings on Wednesday afternoon. Its shares increased by 2.5% on Monday, bringing its year-to-date gain to 91%.

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The PHLX Semiconductor Index rose by 2.2%, achieving its highest close since early March. Chip maker Micron Technology saw a 3% increase, and Applied Materials, which provides equipment and software for semiconductor production, gained 3.7%.

Netflix shares rose by 3.2%, reaching their highest price since late 2021.

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Insurer Chubb experienced a significant decline, shedding 3.7%. This came after the stock had surged by 8.4% to an all-time high late last week following Warren Buffett’s Berkshire Hathaway disclosing a substantial stake in the firm.

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Natural-gas producers continued their upward trend. EQT shares increased by 1.8%, bringing their May gains to over 14%. Comstock Resources, controlled by Dallas Cowboys owner Jerry Jones, rose by 5.1% on Monday, contributing to a 19% increase this month. Warmer weather and rising electricity demand have driven natural-gas futures up by 75% since late March, when they were at historically low levels.

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Wheat futures climbed to their highest price since last summer due to concerns over the Russian crop, which is facing adverse weather and drone attacks from Ukraine. Soft-red winter wheat futures rose by 5.6% in Chicago.

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Metals continued their rally as well. Gold futures increased by $21.70 per troy ounce to close at $2,433.90, setting a new record. Silver rose by 3.7% to reach $32.205 per troy ounce, a new 52-week high. Copper futures also hit a record, rising to $5.0875 per pound in New York.

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Bitcoin surged by 6.1%, settling at $70,058.25, its highest level in over a month.

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