Mixed fortunes for U.S. stocks as tech sectors weigh on markets despite semiconductor strength

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5th March 2024 – (New York) U.S. stocks closed with modest losses on Monday, despite the semiconductor industry building on its robust performance from the previous session.

The Dow Jones Industrial Average receded by 97.55 points to 38,989.83, a decrease of 0.25%. The S&P 500 edged down by 6.13 points to 5,130.95, registering a slight dip of 0.12%. The Nasdaq Composite Index experienced a sharper decline, shedding 67.43 points to close at 16,207.51, a 0.41% fall.

The market presented a mixed landscape, with seven out of eleven primary sectors of the S&P 500 closing in positive territory. Utilities and real estate were the frontrunners in gains, climbing 1.64% and 1.07% respectively. On the other end of the spectrum, communication services and consumer discretionary sectors took the brunt of the losses, descending 1.51% and 1.27%.

Despite the broader market’s downward trend, Nvidia’s robust performance in the artificial intelligence space buoyed investor sentiment. Additionally, Super Micro Computer experienced a notable surge after being included in the S&P 500 roster. Bitcoin-related equities also enjoyed an upswing, tracking the ascent of the digital currency itself. However, the technology sector was held back by Apple and Tesla, which faced headwinds from an EU penalty and adjustments in pricing strategy, respectively.

In an optimistic revision, Bank of America Global Research has increased its year-end forecast for the S&P 500 to 5,400, suggesting a potential uplift of approximately 5% from the current levels. Savita Subramanian, the bank’s head of U.S. equity strategy, cited the potential for companies to stabilise margins through a shift towards efficiency and productivity over global cost reduction and capital-intensive growth.

This revised stance finds company among other financial titans such as Barclays, UBS, and Goldman Sachs, which have projected the S&P 500 will close the year in the 5,200 to 5,400 range.

S&P Dow Jones Indices will usher in Super Micro Computer and Deckers Outdoor to the S&P 500, replacing Whirlpool and Zions Bancorp. These changes are set to take effect from the commencement of trading on March 18, as part of its regular quarterly rebalancing.