Wall Street flat as tech shares shrug off G7 tax deal
U.S. stocks were little changed on Monday as investors remained on the fence ahead of key inflation data later this week, while heavyweight technology shares largely shrugged off a deal by the world’s richest nations on a global minimum corporate tax.
The Group of Seven (G7) advanced economies agreed on Saturday to back a minimum global corporate tax rate of at least 15%, squeezing more money out of multinational companies such as Amazon and Google.
But analysts said immediate market implications would be minimal since the details remained to be negotiated over the coming months.
Shares of Apple Inc, Amazon.com Inc, Facebook Inc and Google-parent Alphabet Inc were trading flat to slightly lower, in line with the broader market’s move.
“While it all sounds good, the road to implementation (of the tax deal) is full of rocks and potholes,” said Ken Polcari, managing partner at Kace Capital Advisors. “I would not react by becoming a seller in any of these names on this headline just yet.”
Chipmakers lagged on concerns about prolonged COVID-19 curbs in Taiwan hitting production of semiconductors further. U.S.-listed shares of Taiwan Semicondcutor, Qualcomm and Advanced Micro Devices fell between 0.5% and 1.4%.
Payments services provider Visa Inc rose 1.2% after Piper Sandler upgraded the stock to “overweight” on favorable U.S. travel trends.
U.S. stocks ended higher on Friday after a tepid U.S. monthly jobs report relieved investors concerned about the Federal Reserve scaling back its massive stimulus program sooner than expected.
The benchmark S&P 500 is inches away from its record highs hit earlier in May as investors shift focus to May’s consumer price data due on Thursday to assess inflationary patterns in the economy.
“What we’re going to see here is a range-bound market as anxiety over inflation data later in the week is probably going to cap stocks,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
At 9:54 a.m. ET, the Dow Jones Industrial Average was down 7.59 points, or 0.02%, at 34,748.80, the S&P 500 was down 5.41 points, or 0.13%, at 4,224.48, and the Nasdaq Composite was down 17.41 points, or 0.13%, at 13,797.08.
Cinema operator AMC Entertainment added 19.6% after racking up a near 200% rise in the past two weeks, driven by retail investors. Other “meme stocks” including GameStop and U.S.-listed shares of BlackBerry rose more than 7% each.
Data center operator QTS Realty Trust surged nearly 21.4% on media reports of a takeover deal by investment firm Blackstone Group for $6.7 billion.
Drugmaker Biogen Inc rose 2.8% ahead of the U.S. FDA’s decision on whether to approve its Alzheimer’s drug aducanumab.
Advancing issues outnumbered decliners by a 1.41-to-1 ratio on the NYSE and by a 1.59-to-1 ratio on the Nasdaq.
The S&P index recorded 45 new 52-week highs and no new low, while the Nasdaq recorded 87 new highs and nine new lows.
(Reporting by Shashank Nayar in Bengaluru; Editing by Maju Samue)