Markets ascended into record territory multiple times last week. Will trends continue to be boosted by positive sentiment or will trading be closely watching for sudden shifts?
Monday
S&P 500 0.19% | NASDAQ 0.10%
Markets opened higher as corporate earnings continued to be released. Cisco (CSCO) was notable as AI stocks climbed higher. Existing home sales (Apr) were almost flat while attention shifts to economic data mid-week.
Tuesday
S&P 500 0.16% | NASDAQ 0.71%
Oil prices fell on Tuesday, and equities dropped slightly with most of the flows leaving growth. The Consumer Price Index (CPI) came in hot with an increase to 3.8% (April) from 3.3%(March). Importantly, high inflation readings could contribute to a possible “higher for longer” rate environment at the Federal Reserve.
Wednesday
S&P 500 0.58%| NASDAQ 1.20%
Mid-week trading was boosted higher on positive earnings sentiment. The S&P500 closed at its highest level in history. However, producer prices (PPI) surged in the month of April.
Thursday
S&P 500 0.77% | NASDAQ 0.88%
Another day of record setting numbers as the Dow Jones joined in the push forward. Hopes for positive talks at the two-day summit between China and the U.S. pushed equities higher across the board. Retail Sales (April) came in at expectations although at a lower rate than in March.
Friday
S&P 500 1.24% | NASDAQ 1.54%
Wednesday and Thursday’s gains were given up ahead of the weekend. Treasury Yields jumped on the inflationary concern of long-term elevated oil prices. Of note, Kevin Warsh will be sworn in as Chairman of the Federal Reserve on Friday, May 22nd.
Conclusion
S&P 500 0.13% | NASDAQ 0.08%
In a week marked by a mix of highs and lows, the result was ultimately flat. Corporate earnings and inflation concerns were at odds with each other as unknowns were still at play internationally. Oil prices were top-of-mind again while a spike with treasury yields indicated a possible sustained level of higher prices. While higher earnings reflect capital investment and near-term strength in balance sheets, inflation could eat away at profits. As markets look to gain a footing, all eyes will be watching the economic environment as well as U.S. interest rate policy in the months to come.
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