GameStop continues, Dow falls

This report is from today’s CNBC Daily Open, our international markets newsletter. The CNBC Daily Open brings investors all the information they need to know, wherever they are. Like it? Subscribe. here.

Weak data sends Dow lower
The Dow Jones Industrial Average fell more than 100 points as weak manufacturing data raised concerns about the strength of the U.S. economy. But the S&P 500 rose 0.11% and the Nasdaq Composite rose 0.56%. Nvidia rose almost 5% after it unveiled new artificial intelligence chips. The yield on the 10-year Treasury note fell after May ISM manufacturing data came in below expectations at 48.7; a reading below 50 indicates an economic recession. Oil prices fell more than 3% as OPEC+ plans to phase out voluntary production cuts.

India stocks fall as election vote counting begins
India’s Nifty and BSE Sensex fell sharply as vote counting began in the world’s most populous country, showing an initial lead was narrower than expected. Both indexes had soared to all-time highs on Monday after exit polls over the weekend showed Prime Minister Narendra Modi was expected to win an unprecedented third term. Elsewhere, South Korea’s KOSPI, Japan’s Nikkei and Australia’s S&P/ASX 200 all fell. Hong Kong’s Hang Seng Index rose slightly, while mainland China’s CSI 300 index added 0.39%.

Gamestop won’t stop
GameStop shares closed 21% higher after soaring more than 70% after meme stock guru Keith Gill appeared to hold a huge position in the video game retailer. The Wall Street Journal reported that E-Trade was considering banning Gill from its platform over concerns of possible market manipulation. Gill, known by his stage name “DeepF—–Value” on Reddit and “Roaring Kitty” on YouTube and X, posted screenshots of his portfolio on Monday showing that his common stock alone had jumped to $140 million from $115.7 million as of Friday’s closing price. The post could not be independently verified by CNBC.

Skin Cancer Vaccine
Moderna and Merck reported that their experimental vaccine, given in combination with Keytruda therapy, showed improved survival and durable efficacy in patients with one of the deadliest forms of skin cancer: About 75% of patients who received the combination were alive and cancer-free at 2.5 years, compared with 55.6% of patients who received Keytruda alone.

Microsoft, Alphabet cut jobs
Microsoft plans to cut some jobs in its mixed reality division, affecting the unit that makes the HoloLens, a move that reflects Microsoft’s shifting focus to AI technology. Alphabet will also lay off at least 100 employees in its cloud division, one of its fastest-growing businesses, CNBC reported.

[PRO] “I missed it” AI stocks
Investors “completely missed out” on this key artificial intelligence chip stock, says Liontrust fund manager Claire Pleydell Bouverie. The stock is up more than 5% this year and 25% in the past 12 months, modest figures compared with some doomed AI companies.

Wall Street had a strong May despite late-day worries, with the Nasdaq Composite Index topping an all-time high of 17,000 and up 6.9% for the month, its best performance since November 2023.

Much of this success can be attributed to a surge following Nvidia’s earnings report. The artificial intelligence giant surged 27% in May and rose nearly 5% on the first trading day of June after announcing plans to launch new AI chips just months after its last announcement, a bold move against competitors.

Another area poised for growth is the weight-loss market, which is expected to reach $100 billion in 10 years’ time. Eli Lilly and Novo Nordisk’s products have been the main focus, but new competitors are emerging and their dominance is not guaranteed. For those who abhor needles, pharmaceutical companies are developing weight-loss drugs.

Structure Therapeutics released clinical trial data showing that patients lost 6% weight after taking the company’s GSBR-1290 pill for 12 weeks, rivaling Eli Lilly’s experimental pill. Shares of Structure Therapeutics soared more than 50% on the news, and JP Morgan expects the company to see even bigger gains, according to CNBC’s Pia Singh.

Concerns The strength of the economy weighed on the Dow Jones Industrial Average. The Atlanta Fed’s GDP Now Tracker, which monitors economic growth, sharply cut its second-quarter growth forecast to 1.8% from 2.7% after disappointing news from the manufacturing sector.

Caterina Simonetti, senior vice president and private wealth advisor at Morgan Stanley Private Wealth Management, told CNBC that the market is “hanging sideways” as it tries to assess valuations.

“We’re in a situation where interest rates are rising, which of course has an impact on consumers, and we’re seeing an increase in credit card debt,” Simonetti said. “The Fed is likely to wait until the consumer price index is closer to its target. [2%] They need to see targeting data before they can move interest rates, which will impact consumer behavior and corporate profits.

“It’s early June, so valuations are still being calculated so it’s natural that the market is a bit flat and will likely remain so as we move into next earnings season,” Simonetti warned.

— CNBC’s Jeff Cox, Yun Lee, Pia Singh, Brian Evans, Jesse Pound, Alex Harring, Spencer Kimball, Annika Kim Constantino, Christina Cheddar Burke, Sophie Kidderlin, Jorden Novett, Lillian Rizzo, Jennifer Elias, Shreyasi Sanyal and Alex Sherman contributed to this report.