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Stocks Rise, Dow Seeks 8th Consecutive Win as Rate Cut Hopes Abound
U.S. stocks rose on Friday, setting up the Dow for an eighth consecutive day of gains, as investors waited for a parade of Fed speakers to test growing confidence that a rate cut is on the way.
The Dow Jones industrial average (^DJI) rose about 0.2%, with the benchmark S&P 500 index (^GSPC) gaining around 0.3% in the wake of closing above 5,200 for the first time in a month. The high-tech Nasdaq Composite (^IXIC) also jumped about 0.2% at the opening.
The blue-chip Dow rose, marking its longest winning streak this year, as stocks recovered from the April slump. Growing conviction that the Federal Reserve could cut interest rates sooner than expected – given recent signals on one job market cooling – boosted the rally.
See more information: How does the job market affect inflation?
Given that, investors will be listening closely to speeches from a packed lineup of Fed speakers on Friday for more information on the timing, pace and chances of monetary policy easing. Michelle Bowman, Neel Kashkari and Austan Goolsbee are among those scheduled to appear.
Earlier, Atlanta Fed chief Raphael Bostic said that sees a single rate cut later this year, but repeated fellow officer Mary Daly’s preference by waiting for a more robust signal that price pressures are easing.
On the corporate front, TSMC (TSM) shares soared after the Taiwanese contract chipmaking giant said its sales jumped 60% in April. He credited sustained demand for AI combined with a renaissance in consumer electronics such as smartphones.
Live updates5
- Friday, May 10, 2024 at 5:05 pm GMT+2
Stock Trends in Early Trading: Novavax, TSM, Nvidia
Here are the actions in Yahoo Finance Trending Page early Friday:
Novavax (NVAX): The pharmaceutical company’s shares rose more than 130% on Friday after it said it had reached a $1.4 billion deal with French company Sanofi to co-market its current COVID-19 vaccine worldwide.
Taiwan semiconductor manufacturing company (TSM): Shares rose on Friday, about 5%, after the chipmaker announced its April sales increased 60% year over year, signaling lasting demand for AI-powered chips. TSM is a key supplier to tech titans including Nvidia (NVDA)It is OMG (OMG)which recovered in the wake of the TSM results.
SoundHound (SOUND): Shares of the artificial intelligence company jumped more than 15% after recorded revenue growth of 73% in the first quarter and boosted its full-year revenue outlook to 2024. The company’s CEO Keyvan Mohajer said voice AI is quickly becoming a must-have tool for customer service.
Sweet green (SG): Shares rose 40% on Friday after the fast-casual salad chain earnings reported in the first quarter which exceeded expectations and also boosted its full-year outlook for higher menu prices. Same-store sales rose 5% in the quarter amid higher prices, with the company also touting its new steak offerwhich was officially added to menus on May 7th.
Consumer sentiment falls in May as inflation and interest rate concerns take hold
Americans are increasingly concerned about persistent inflation and the prospect of high interest rates for longer than initially expected.
The most recently University of Michigan Consumer Sentiment Survey released on Friday revealed a 13% decline in overall sentiment during the month of May. The index reading for the month came in at 67.4, its lowest level in six months, and well below economists’ expectations of a reading of 76.2.
Inflation expectations for next year reached 3.5% in Friday’s report, up from 3.2% the previous month. Long-term inflation expectations rose to 3.1%, up from 3% the previous month.
“While consumers have reserved judgment in recent months, they are now noticing negative developments across a number of dimensions,” Joanne Hsu, director of Consumer Research, said in a statement. “They expressed concerns that inflation, unemployment and interest rates may be moving in an unfavorable direction next year.”
Stocks open higher; Dow targets 8th consecutive day of gains
Stocks opened higher on Friday, with the Dow Jones Industrial Average (^DJI) looking to end the week with his eighth consecutive victory, after a particularly slow April for the markets.
At the open, the Dow rose about 0.2%, and the benchmark S&P 500 index (^GSPC) gained about 0.3% in the wake of closing above 5,200 for the first time in a month. The high-tech Nasdaq Composite (^IXIC) also jumped about 0.2%.
The benchmark 10-year Treasury yield (^ TNX) rose about 4 basis points to trade near 4.49%.
The gains come as investors appear more confident that the Federal Reserve could cut interest rates sooner than expected, after an April jobs report showed signs of a job market cooling.
A series of Fed speakers on Friday could offer more clarity on the path forward for interest rates. Michelle Bowman, Neel Kashkari and Austan Goolsbee are scheduled to appear.
Travel Trends
Citi is doing a little profit mining today by pointing out these AirBNB notes (ABNB) call this week:
“Nights booked in Paris during the Summer Olympics are 5x higher than last year, while Germany is seeing a similar trend for the Euros this summer, with nights booked almost 2x higher than last year.”
Morning market statistics to know
The feel-good vibe in the markets continues and happiness begins to rise.
The S&P 500 remains on track for a third consecutive weekly gain for the first time since February. Furthermore, as Deutsche Bank points out, this was the strongest six-session performance for the benchmark index this year so far. The S&P 500 is up a solid 3.9% since its recent low on May 1.
