Asset Classes

Free investment financial education


Multilingual content from IBKR

Close Navigation
Learn more about IBKR accounts

Some normal activity after a big run

Posted June 21, 2024 at 9:45 am
Patrick J. O’Hare

It is reasonable to refer to yesterday’s session as a mixed to slightly weaker session. It is also reasonable to blame NVIDIA (NVDA) and other mega-cap stocks for weighing on sentiment. NVIDIA, for instance, had been up 3.8% at one point but finished the day down 3.5%.

NVIDIA’s reversal had a lot to do with the Nasdaq breaking a seven-session win streak. It basically took the wind out of the market and became a cue for profit-taking activity in other momentum-fueled stocks.

NVIDIA is down another 2.0% this morning, and, true to form, that disposition has been a drag on the equity futures market along with some slowdown worries that were piqued by some weaker-than-expected flash PMI readings for June out of Asia and the eurozone.

Currently, the S&P 500 futures are down six points and are trading 0.1% below fair value, the Nasdaq 100 futures are down three points and are trading roughly in-line with fair value, and the Dow Jones Industrial Average futures are down 27 points and are trading 0.1% below fair value.

Those aren’t unnerving indications.  Arguably, they fall under the umbrella of being normal at this point for a market — and some specific stocks — that have come a long way in a short amount of time and are due for some consolidation.

Given the weight of the mega-cap stocks, the broader market will struggle to advance if their support is lacking; however, a lack of support from them doesn’t necessarily mean the market has to lose a lot of ground. It won’t if there is a rotation away from the mega-cap stocks and into other stocks.

Where the market will struggle is if the mega-cap stocks are weak and nothing else garners interest to compensate for their weakness. That wasn’t the case yesterday. The mega-cap stocks faded but there was buying interest elsewhere, evident in the fact that the equal-weighted S&P 500 closed fractionally higher while the market-cap weighted S&P 500 closed 0.3% lower. Separately, the Dow Jones Industrial Average increased 0.8%.

We’ll have to wait and see what today brings on what is going to be a very heavily-traded session with the quarterly options expiration and the index rebalancing for S&P Dow Jones Indices and ETFs.

Also, the market will be reacting to a slate of economic data that includes the preliminary June S&P Global U.S. Manufacturing and Service PMIs at 9:45 a.m. ET, the May Existing Home Sales Report at 10:00 a.m. ET, and the May Leading Indicators Report at 10:00 a.m. ET.

That data should kick up some dust in the Treasury market as traders read into what any of these released could mean for monetary policy. Currently, the 2-yr note yield is down three basis points to 4.70% and the 10-yr note yield is down three basis points to 4.22%.

Originally Posted June 21, 2024 – Some normal activity after a big run

Join The Conversation

If you have a general question, it may already be covered in our FAQs. If you have an account-specific question or concern, please reach out to Client Services.

Leave a Reply

Disclosure: Interactive Brokers

Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from and is being posted with its permission. The views expressed in this material are solely those of the author and/or and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Disclosure: ETFs

Any discussion or mention of an ETF is not to be construed as recommendation, promotion or solicitation. All investors should review and consider associated investment risks, charges and expenses of the investment company or fund prior to investing. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Disclosure: Options Trading

Options involve risk and are not suitable for all investors. Multiple leg strategies, including spreads, will incur multiple commission charges. For more information read the "Characteristics and Risks of Standardized Options" also known as the options disclosure document (ODD) or visit

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.