Debt Deadline • Data Center Boom? • REIT Dividend Hike

May 25, 2023 | Hoya Capital

Debt Deadline • Data Center Boom? • REIT Dividend Hike Daily Recap May 25 Written By Alex Pettee, CFA U.S. equity markets snapped a two-day skid Thursday as strong AI-fueled earnings results from chip maker Nvidia offset a continued uptick in benchmark interest rates amid the ongoing debt ceiling stalemate. Following back-to-back declines of roughly 1%, the S&P 500 rebounded by 0.9% today, while the tech-heavy Nasdaq 100 rallied 2.4%.

The Mid-Cap 400, Small-Cap 600, and Dow all finished lower. Higher rates pressured real estate equities, which were among the laggards for a second day despite a lift from technology REITs. The Equity REIT Index posted fractional declines today. Both data center REITs - Digital Realty (DLR) and Equinix (EQIX) - rallied more than 5% today after chip maker Nvidia (NVDA) reported blowout first-quarter results driven by strength in its data center business.

American Tower (AMT) raised its quarterly dividend by 1% to $1.57/share, becoming the 52nd REIT to raise its dividend this year, offset by 16 REIT dividend reductions. Explore hoya capital INVESTMENT RESEARCH Income Builder Daily Recap U.S. equity markets snapped a two-day skid Thursday as strong AI-fueled earnings results from chip maker Nvidia offset a continued uptick in benchmark interest rates amid the ongoing debt ceiling stalemate. Following back-to-back declines of roughly 1%, the S&P 500 rebounded by 0.9% today, while the tech-heavy Nasdaq 100 rallied 2.4%.

The Mid-Cap 400, Small-Cap 600, and Dow all finished lower on the session. A relatively strong slate of economic data and concern over a potential technical default lifted the 2-Year Treasury Yield and 10-Year Yield to their highest levels since early March. Higher rates pressured real estate equities, which were among the laggards for a second day despite a lift from technology REITs. The Equity REIT Index posted fractional declines today, with 14-of-18 property sectors in negative territory, while the Mortgage REIT Index declined 2.2%.

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