Key points to remember
- The S&P 500 Index gained 0.5% on Friday, June 5, 2024, after the latest employment report showed signs of cooling in the labor market, reinforcing expectations for interest rate cuts.
- Shares of Meta Platform soared amid signs that Facebook parent company’s AI investments may be starting to pay off.
- Southwest Airlines shares have been falling. The company recently adopted a “poison pill” plan to prevent an activist investor from acquiring more shares.
Major U.S. stock indexes rose to close out the shortened trading week following the Independence Day holiday.
Friday’s gains came after the June jobs report showed a slowing pace of hiring and a rising unemployment rate, reinforcing expectations that the Federal Reserve could decide to cut interest rates in the coming months.
The S&P 500 index rose 0.5% to close at a record high for the third straight session. A 0.9% jump helped the Nasdaq close at another record high. After trading in negative territory for much of the session, the Dow Jones advanced in the afternoon to close up 0.2%.
Shares of Meta Platforms (META), the parent company of Facebook and Instagram, rose 5.9%, marking the best performance on Friday in the S&P 500 and posting the stock’s highest close ever. The gains came amid optimism that Meta’s massive investments in artificial intelligence (AI) technology could start to translate into revenue gains, with Bernstein analysts recently reporting that AI-powered algorithms are increasing the time users spend in Meta’s apps.
Baxter International (BAX) shares gained 5.3% after reports surfaced that the medical technology company is in talks to sell its kidney care unit Vantive to private equity firm Carlyle Group (CG). Sources reportedly said the two companies have entered into exclusive negotiations over a deal worth $4 billion, including debt.
Growing optimism around AI helped push shares of semiconductor maker Advanced Micro Devices (AMD) higher, gaining 4.9%. AMD is set to accelerate shipments of its latest generation of graphics processing units (GPUs) optimized for generative AI applications, and analysts expect new AI-related products to launch in the second half of the year.
Shares of Southwest Airlines (LUV) fell 5.7% on Friday, marking the biggest losses of any S&P 500 component. The company adopted a “poison pill” shareholder rights plan earlier this week aimed at preventing activist investor Elliott Investment Management from acquiring more shares. The activist firm has called for a management shakeup.
Shares of First Solar (FSLR) fell 3.9% to cap a volatile trading week for the solar technology company. The stock fell Tuesday after Baird analysts cut their price target based on updated cost and pricing expectations, then rallied sharply in Wednesday’s abbreviated session. First Solar has drawn attention for its prospects 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) fell 3.8%. The stock also benefited from AI optimism, but Micron issued a modest revenue forecast when it reported quarterly results last week, raising questions about its growth trajectory.
