Hello readers,
It's been an eventful day on Wall Street, with technology stocks and artificial-intelligence hype taking a back seat, at least for now. The market saw a shift in momentum, as quarterly results from Dell shed light on the complexities of AI hopes and their impact on stock performance. Dell's stock experienced a sharp decline following revelations about its server sales for AI use and the associated lack of profitability. Despite this setback, Dell's stock remains up 82% for the year.
The Nasdaq Composite spent most of the day in the red, with AI bellwether Nvidia ending down 0.8%. Meanwhile, there was a noticeable rotation into more mundane sectors, with the S&P 500 Consumer Staples sub-index outperforming the broad index's gain. Additionally, health insurers experienced a relief rally, with Elevance and UnitedHealth making significant gains.
On a positive note, American Express has seen a remarkable surge in its stock performance, with shares up over 25% this year. The company's annualized return since the start of 2020 has outpaced the S&P 500's return by almost 4 percentage points.
Gap also made headlines, reporting a 3% rise in companywide comparable-store sales, surpassing Wall Street's expectations. All of Gap's brands, including Old Navy, Athleta, and Banana Republic, saw growth in comparable-store sales, defying previous projections.
Looking ahead, companies reporting earnings next week include Lululemon, DocuSign, Campbell Soup, and J.M. Smucker. Additionally, all eyes will turn to the jobs report for the month of May.
Stay tuned for more updates on the latest market developments.
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