Stocks struggled to gain much traction as a rally to all-time highs spurred calls for a near-term pullback amid signs of buyer exhaustion.
The S&P 500 briefly topped the historic 5,500 mark, remaining above a technical threshold that typically hints at an overbought market. Big tech saw a mixed performance, with Apple Inc. down and Nvidia Corp. heading toward a fresh peak. After coming close to erasing this year’s losses, Treasuries retreated.
“Bullish momentum remains intact for the S&P 500 and Nasdaq, but near-term overbought conditions coupled with deteriorating breadth make equities vulnerable to a pullback or correction,” said Craig Johnson at Piper Sandler.
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Economic data mostly pointed to weakness, with new home construction slumping to the slowest pace in four years and the Philadelphia Fed Index trailing estimates. US initial jobless claims were little changed at 238,000 last week.
The S&P 500 edged up slightly, led by gains in energy shares. Dell Technologies Inc. rose after Chief Executive Officer Michael Dell said the company is building a “Dell AI factory” for Elon Musk’s startup xAI alongside Nvidia. Banks fell.
Treasury 10-year yields advanced six basis points to 4.28%. The dollar rose. Traders are betting the Bank of England will cut interest rates in August after policymakers signalled they are willing to start easing monetary policy.
While the S&P 500 is marching from one record to the next, fewer and fewer stocks are participating in this year’s rally.
Nearly a third of its constituents have hit a one-month low in the past month, data compiled by Bloomberg through the end of last week show. That far outnumbers those that are pushing it higher. In fact, just 3.2% hit a one-month high, including Apple Inc. and high-flying Nvidia Corp., which just passed Microsoft Corp. to become the world’s most valuable company.
“With AI demand remaining robust and the technology likely to disrupt and transform industries in the years to come, we think it is important for investors to ensure they’re sufficiently invested,” said Solita Marcelli at UBS Global Wealth Management.
Meantime, a bevvy of measures shows how market breadth remains weak, boosting uncertainty about the rally’s staying power. Take the NYSE advance-decline line, a popular indicator that tracks the number of securities rising minus the number falling on the exchange each day. It closed at a fresh six-week low on Friday.
Source: https://ca.finance.yahoo.com/news/asian-equities-slip-traders-search-224147804.html
