AI Stocks Drive Market Rally, GameStop Falls, and Disney's Box Office Boost - What Wall Street is Talking About
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It may be the first official week of summer, but the artificial intelligence trade doesn't seem ready to take a vacation. AI-related stocks were the key driver of the market's rally on Monday. Apple and Microsoft led big techs to solid gains, helping to boost the Nasdaq nearly 1% by the closing bell. Chip-maker Broadcom and AI-server-maker Super Micro were two of the top four gainers on the S&P 500 for the day, picking up more than 5% each. Dell - another AI server-maker that is not part of the S&P -- also jumped 5%. That was helped by a report from Bernstein noting that Dell "fulfills all conditions for S&P inclusion," with the second highest market capitalization of eligible companies not currently part of the index. The company was also the subject of another positive report from Morgan Stanley, which called concerns about AI server margins "misguided." Those margins played a key role in Dell's disappointing quarterly report last month, as Heard on the Street's Dan Gallagher noted at the time. Elsewhere, GameStop's shares fell 12% after the meme stock pioneer held its virtual annual shareholder meeting that got delayed from Friday due to a surge of viewers that crashed the site. Chief Executive Ryan Cohen told investors he plans to focus on profitability with a smaller store footprint. The strong opening of Disney's "Inside Out 2" gave some momentum to what has been a sluggish summer box office so far. Disney shares jumped 1.6% while exhibition stocks Cinemark and IMAX Holdings notched gains of 4.5% and 1.8%, respectively. The Dow Jones Industrial Average rose 189 points, or 0.5%, to close at 38,778. The S&P 500 rose 0.8% by the close. Here’s what else Heard on the Street was watching: Live Markets Snapshot Crude oil, Bitcoin USD and gold continuous contract data refresh every time you open this email. Other data are as of market close. MEMBER MESSAGE: Mansion Global Boutique Summer Staycation Must-Haves Keep the kids—and kids at heart—entertained all season long with our summer break survival kit. SHOP Two Is Better Than One in the Alzheimer’s Market By David Wainer PHOTO: HANNAH YOON FOR THE WASHINGTON POST/GETTY IMAGES If you have a potentially massive market all to yourself, a new competitor is usually bad news—unless the new rival can help you build out the market. That might be the case for midsize biotech Biogen and its Japanese partner Eisai. Their Alzheimer’s drug, Leqembi, was approved by the Food and Drug Administration last year but it has failed to make major inroads. It might do better once Big Pharma gets into the field as well. Last week, a panel of independent advisers to the FDA unanimously voted in support of Eli Lilly’s donanemab, a competitor in the same class of drugs that target amyloid plaques in the brain. Read More The Wall Street Journal’s Evan Gershkovich is being wrongfully detained in Russia after he was arrested while on a reporting trip and accused of spying—a charge the Journal and the U.S. government vehemently deny. Follow the latest coverage, sign up for an email alert, and learn how you can use social media to support Evan. French Markets Could Do With More Sangfroid By Jon Sindreu PHOTO: SARAH MEYSSONNIER/REUTERS French politics are full of twists and turns right now, but they probably aren’t leading investors down a cul-de-sac. The country’s benchmark stock-market index, the CAC 40, is down about 6% since the success of Marine Le Pen’s euroskeptic and far-right National Rally party in this month’s European Union elections. Investors are worried about the National Rally taking a lead in parliament after a snap election that French President Emmanuel Macron has called for later this month. A more immediate test comes Wednesday, when the European Union is likely to place the country on a fiscal adjustment plan because of its budget deficit. Read More In Brief Booming demand for advanced chip packaging technologies has helped Japan's Disco catch AI fever, Jacky Wong writes. Apple was once seen as a major disrupter to banks. But recent updates to the tech giant's payment platform might turn out well for the industry, Telis Demos writes. 📰 Enjoying this newsletter? Get more from WSJ and support our journalism by subscribing today with this special offer. Today's Markets News Bonds Are Rallying. That's Set to Drag Down Mortgage Rates. Broadcom Stock Tests Fresh Record High Ether ETFs Could Come to Market This Summer GameStop Falls After Brisk Shareholder Meeting 📅 What's Coming Up Tuesday will bring quarterly results from KB Home and America's Car-Mart. Also, look for the latest data on retail sales from the Commerce Dept. and industrial production from the Federal Reserve.
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