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Key Takeaways
The S&P 500 added 0.5% on Friday, June 5, 2024, after the latest jobs report showed signs of a cooling labor market, boosting expectations for interest rate cuts.
Meta Platform shares soared amid signals that the Facebook parent’s AI investments could be starting to pay off.
Shares of Southwest Airlines plummeted. The company recently adopted a “poison pill” plan aimed at preventing an activist investor from acquiring more shares.
Major U.S. equities indexes pushed higher to close the shortened trading week after the Independence Day holiday.
Friday’s gains came after the June jobs report showed a cooldown in the pace of hiring and an uptick in the unemployment rate, lifting expectations that the Federal Reserve could move to cut interest rates in the coming months.
The S&P 500 added 0.5% to notch an all-time closing high for the third straight session. A jump of 0.9% lifted the Nasdaq to another record close. After trading in negative territory for much of the session, the Dow advanced in the afternoon to close 0.2% higher.
Shares of Facebook and Instagram parent Meta Platforms (META) soared 5.9%, marking Friday’s top performance in the S&P 500 and posting the stock’s highest-ever close. The gains came amid optimism that Meta’s massive investments in artificial intelligence (AI) technology could be starting to flow through into revenue gains, with analysts at Bernstein recently indicating that AI-driven algorithms are increasing the time spent by users in Meta’s apps.
Shares of Baxter International (BAX) gained 5.3% following reports that the health care technology firm is negotiating a potential sale of its kidney care spinoff Vantive to private equity firm Carlyle Group (CG). Sources reportedly said that the companies had entered exclusive talks surrounding a deal worth $4 billion, including debt.
Increasing AI optimism helped boost shares of semiconductor manufacturer Advanced Micro Devices (AMD), which gained 4.9%. AMD is poised to ramp up shipments of its latest generation of graphics processing units (GPUs) that are optimized for generative AI applications, and analysts anticipate new AI-related product launches in the second half of the year.
Southwest Airlines (LUV) shares fell 5.7%, marking the widest losses of any S&P 500 component on Friday. The company earlier this week adopted a “poison pill” shareholder rights plan aimed at preventing activist investor Elliott Investment Management from acquiring more shares. The activist firm has called for a leadership shakeup.
First Solar (FSLR) shares sank 3.9% to wrap up a volatile week of trading for the solar technology firm. The stock fell on Tuesday after analysts at Baird trimmed their price target on updated cost and pricing expectations, then recovered strongly in Wednesday’s abbreviated session. First Solar has drawn attention on the prospect of helping power demand from AI data centers, but it faces uncertainties related to the upcoming presidential election and the future of U.S. clean energy policies.
Shares of computer memory and data storage provider Micron Technology (MU) slid 3.8%. The stock has also benefited from AI-related optimism, but Micron issued soft revenue guidance when it reported its quarterly earnings last week, raising questions about its growth trajectory.
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