Stocks ended higher on Friday – closing off a solid rally this week that saw markets rebound from losses for more than seven consecutive weeks as fears of a recession continued in light of positive economic data that last month. Inflation was showing marginally lower.
The Dow Jones Industrial Average rose 1.8%, nearly 600 points, while the S&P 500 and the tech-heavy Nasdaq Composite rose 3.3%.
Stocks rallied after solid economic data showed inflation eased slightly: The Fed’s preferred inflation reading, the main personal consumption spending price index, rose 4.9% in April from a year earlier, down from 5.2% in March.
Despite the positive data, inflation remains at historically high levels and experts warn it may take some time to return to normal: “Inflation is slowing down but I expect rising prices for the rest of this year.” will continue to be a problem for the US economy in the U.S.,” says Bill Adams, chief economist at Comerica Bank.
According to recently released minutes from the central bank’s latest meeting in May, most Fed officials are in favor of a 0.50% increase in interest rates at each subsequent policy meeting in June and July.
Solid earnings reports in recent days, particularly from retailers, helped lift markets higher this week and ease some bearish fears, with Ulta Beauty shares up nearly 10% on Friday after strong quarterly results. increased.
With retail and consumer stocks rebounding, technology companies led the market gain: Dell Technologies jumped more than 13% after investors lauded solid quarterly earnings, while shares of tech giants like Apple and Amazon 3. jumped over %.
After seven consecutive weeks of losses, the shares have finally rebounded, posting their best week since November 2020. The Dow rose more than 5% since Monday, ending an eight-week-long losing streak, while the S&P 500 and Nasdaq each gained more than 6%. Falling for seven consecutive weeks. Despite the recent relief rally in the markets, the stock is still in one of its worst years in recent history, as investors worry about rising inflation and rising rates.
“Some of the recent panic about an impending recession” was clearly exaggerated, says Adam Crisafuli, founder of Vital Knowledge. “Additional evidence of inflation” has helped boost investor sentiment, while the S&P 500 “didn’t deserve to decline as dramatically as it did throughout April and the first half of May.”
“Earnings season wasn’t nearly as bad as Cisco, Target, and Walmart, with many companies posting good results/guidance,” says Crisafuli, who has helped break the “cycle of retail negativity” that has been going on in recent weeks. Of. He points to companies such as Dell, Dollar General, Dollar Tree, Intuit, Macy’s, Nordstrom, Ralph Lauren, Splunk, Williams-Sonoma and Zoom as examples of companies with strong quarterly earnings.
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