Dow drops on weak manufacturing data, GameStop soars

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

Weak data dents Dow
The Dow Jones Industrial Average dropped more than 100 points after weak manufacturing data raised concerns about the strength of the U.S. economy. However, the S&P 500 edged higher by 0.11%, while the Nasdaq Composite gained 0.56%. Nvidia jumped almost 5% after introducing new artificial intelligence chips. The yield on the 10-year Treasury fell on weaker-than-expected ISM manufacturing data, which came in at 48.7 in May. A reading below 50 is indicative of a contraction. Oil prices fell more than 3% as OPEC+ plans to phase out voluntary production cuts. 

GameStop can’t stop
Shares of GameStop closed 21% higher after jumping more than 70%, as meme stock leader Keith Gill appeared to hold on to a massive position in the video game retailer. The Wall Street Journal reported that E-Trade was considering banning Gill from its platform over concerns of potential market manipulation. Gill, who goes by “DeepF—–Value” on Reddit and “Roaring Kitty” on YouTube and X, posted a screenshot of his portfolio on Monday, showing the value of his common stock alone jumped to $140 million from $115.7 million as of Friday’s close. The post could not be independently verified by CNBC. 

Skin cancer vaccine
Moderna and Merck reported that their experimental vaccine, administered to patients with the deadliest form of skin cancer in conjunction with the therapy Keytruda, demonstrated improved survival rates and durable efficacy. Nearly 75% of patients who received the combination were alive and cancer-free at the 2.5-year mark, compared to 55.6% of patients who received Keytruda alone. 

Paramount merger
Paramount and Skydance have agreed to merger terms of a deal valued at $8 billion, CNBC’s David Faber reported Monday. The deal is awaiting approval from Paramount’s controlling shareholder, Shari Redstone. Apollo Global Management and Sony have also expressed an interest in buying Paramount for about $26 billion, however, Redstone has favored a deal that would keep Paramount together.

Microsoft layoffs
Microsoft will cut some jobs at its mixed reality division, affecting the department that helps make HoloLens. The augmented reality headset has faced challenges, including reports of nausea and other issues experienced by soldiers using the device. This move reflects a shift in Microsoft’s focus towards AI technologies.

[PRO] Piper Sandler’s triple select
With all three major indexes clocking their sixth straight winning month in the past seven, Piper Sandler has picked a handful of stocks that could benefit from a favorable macroeconomic backdrop, strong company fundamentals and complementary chart analysis. All the stocks are rated as overweight by Piper Sandler. 

Wall Street had a strong May, despite some late jitters. The Nasdaq Composite reached a new high, breaching 17,000 for the first time, and ended up 6.9% for the month — its best performance since November 2023.

Much of this success was fueled by Nvidia‘s post-earnings surge. The artificial intelligence giant soared 27% in May. On the first trading day of June, it gained nearly 5% after announcing plans to launch a new AI chip, just months after its last release, signaling a bold move against competitors. 

In another area of growth, the weight-loss market is projected to be worth $100 billion by the end of the decade. While Eli Lilly and Novo Nordisk offerings have been the primary focus, their dominance isn’t guaranteed as new competitors emerge. For those averse to needles, drug makers are developing weight-loss pills. 

Structure Therapeutics released data from a clinical trial showing a 6% weight loss after patients took its GSBR-1290 pill for 12 weeks, challenging an experimental pill from Eli Lilly. Structure Therapeutics’ shares jumped over 50% following the news. According to CNBC’s Pia Singh, JPMorgan anticipates even higher gains for the company. 

Concerns about the strength of the economy weighed on the Dow. The Atlanta Federal Reserve’s GDPNow tracker, which monitors economic growth, sharply lowered its second-quarter growth forecast to 1.8% from 2.7%, following disappointing news from the manufacturing sector.

Katerina Simonetti, senior VP and private wealth advisor at Morgan Stanley Private Wealth Management, told CNBC that markets are “trading sideways” as they try to assess valuations.  

“We’re in a higher interest rate environment, which is of course effecting the consumer and as we see rising credit card debt,” Simonetti said. “The Fed is most likely to wait for the CPI number to get closer to their [2%] target data before they are going to move rates, which means it is going to affect the consumer behaviour and corporate earnings. 

“We are early in the month of June, its only natural that the market is trading sideways a bit as we’re figuring out valuations. And it will be like this until we get into the next earning season,” Simonetti warned.  

— CNBC’s Jeff Cox, Yun Li, Pia Singh, Brian Evans, Jesse Pound, Alex Harring, Spencer Kimball, Annika Kim Constantino, Christina Cheddar Berk, Sophie Kiderlin, Jorden Novet, Lillian Rizzo and Alex Sherman contributed to this report.