Market Update: Technology Stocks Power Nasdaq to Record High; OPEC Meeting in Focus

Technology stocks propelled the Nasdaq Composite Index to record highs on Wednesday, as investors eyed potentially improving trade relations between the United States and European Union.

Technology Stocks Rally

The technology sector outperformed Wednesday as shares of Netflix (NFLX) and Facebook (FB) set fresh record highs. The large-cap S&P 500 Index rose 0.2% to 2,767.32. Its IT component advanced 0.4%. Meanwhile, real estate rose 1.1% and discretionary shares added 0.5%.

The Nasdaq climbed 0.7% to close at 7,781.51. The tech-driven index is up 4.6% for June, having set record highs on half a dozen occasions.

Dow industrials extended their slump to seven days, falling 42.41 points, or 0.2%, to close at 24,657.80.

Dow blue-chip Disney Co (DIS) upped its bid for Twenty-First Century Fox (FOXA) assets to $38 per share, or $71.3 billion, surpassing an earlier offer made by Comcast. Last week, the NBCUniversal parent offered $65 billion in cash.

Expected volatility over the next 30 days declined on Wednesday, as calm trading conditions returned to Wall Street. The CBOE Volatility Index fell 4.1% to 12.80. The VIX trades on on a scale of 1-100 where 20 represents the historic mean.

U.S.-EU Trade Rift Thaws

Investors received some reprieve Wednesday from trade-war rhetoric amid reports that the U.S. and European Union were working out a new deal on automobiles.

According to The Wall Street Journal, the U.S. ambassador to Germany has met with German automakers BMW, Volkswagen and Daimler, where they proposed the idea of ending car tariffs between the U.S. and its EU allies. Germany has reportedly offered to scrap the EU’s 10% tax on EU automobiles  as part of a broader pact involving industrial goods.

Stocks have been pressured all week by the threat of all-out trade war between the United States and China after President Trump announced tariffs on up to $50 billion worth of Chinese goods. The president late Monday directed his administration to identify $200 billion worth of Chinese goods for additional duties after Beijing threatened counter-tariffs on American-made products.

OPEC Meeting in Focus

A Saudi-led plan to boost oil production is being met with resistance by Iran ahead of a high-profile OPEC meeting later this week.

Iran’s oil minister Bijan Zanganeh called the cartel an “American organization” and signaled his country’s opposition to higher production quotas. Earlier, the Islamic Republic had reportedly agreed to make a compromise on a small increase in output.

“OPEC is not an organization to receive its instruction from President Trump,” Zanganeh said upon his arrival in Vienna, Austria, the venue of the upcoming meeting.

“The U.S. president has blamed OPEC for the price hike. Indeed, the real responsibility for the current oil price hike lies with the U.S. president himself,” he added, as reported by the Financial Times.

Saudi Arabia is scrambling to convince fellow members of the Organization of the Petroleum Exporting Countries to pass a resolution relaxing production cuts as the kingdom seeks to maintain market share.

Russia, which openly backs a production hike, wants OPEC and its allies to boost output by a combined 1.5 million barrels per day.

Featured image courtesy of Shutterstock. 

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi