Closing Stock Market Summary
The stock market ended the session on an upbeat note. The major indices all settled at or near session highs, which marked a fresh all-time closing high for the Nasdaq Composite. The S&P 500 settled within ten points of its all-time high close.
The Russell 2000 continued its recent outperformance, gaining 1.2% today, with some added help from another meme stock rally that saw the likes of GameStop (GME 48.75, +18.30, +60.1%) and AMC Entertainment (AMC 6.85, +1.66, +32.0%) trade up more than 100% at one point before succumbing to some profit-taking activity. The Russell 2000 is the best performing index this month, up 5.7% so far.
The major indices traded in mixed fashion for most of the session, however, as participants digested the April Producer Price Index (PPI). The headline inflation readings were hotter-than-expected, up 0.5% month-over-month for total PPI and core PPI versus an expected 0.3% and 0.2%, respectively, but the sizable downward revisions to last month's readings kept the market response more mixed rather than negative.
Fed Chair Powell called the data "quite mixed" in a moderated discussion at the Foreign Bankers' Association's annual meeting.
The Treasury market faced immediate selling pressure following the release of the PPI report, but price action quickly shifted and the bond market settled with gains in front of the Consumer Price Index tomorrow at 8:30 ET. The 10-yr note yield was at 4.48% before the data, jumped to 4.52% immediately after the release, and settled the session at 4.45%.
Stocks shifted into rally-mode in the afternoon trade, coinciding with shares of Alphabet (GOOG 171.93, +1.03, +0.6%) making a sharp turn higher. This was in response to GOOG introducing new AI features at its developers conference. Other mega cap stocks traded up alongside Alphabet, boosting the broader market.
In other corporate news, Dow component Home Depot (HD 340.50, -0.46, -0.1%) received a negative response to its earnings report that stemmed from disappointing sales activity at the home improvement retailer.
Eight of the 11 S&P 500 sectors settled with gains led by information technology (+0.9%) and real estate (+0.7%). The consumer staples sector was the worst performer, logging a 0.2% gain.
- S&P 500:+10.0% YTD
- Nasdaq Composite: +10.0% YTD
- S&P Midcap 400: +8.6% YTD
- Dow Jones Industrial Average: +5.0% YTD
- Russell 2000: +2.9% YTD
Reviewing today's economic data:
- April NFIB Small Business Optimism 89.7 (consensus 88.9); Prior 88.5
- April PPI 0.5% (consensus 0.3%); Prior was revised to -0.1% from 0.2%; April Core PPI 0.5% (consensus 0.2%); Prior was revised to -0.1% from 0.2%
- The key takeaway from the report is that nearly three quarters of the increase in final demand prices was due to a 0.6% increase in the index for final demand services, something that will detract from the Fed's confidence that inflation is on a sustainable path to its 2% target.
Wednesday's economic calendar features:
- 7:00 ET: Weekly MBA Mortgage Index (prior 2.6%)
- 8:30 ET: April CPI (consensus 0.4%; prior 0.4%), Core CPI (consensus 0.3%; prior 0.4%), April Retail Sales (consensus 0.4%; prior 0.7%), Retail Sales ex-auto (Briefing.com consensus 0.2%; prior 1.1%), and May Empire State Manufacturing Index (consensus -9.0; prior -14.3)
- 10:00 ET: March Business Inventories (consensus 0.0%; prior 0.4%) and May NAHB Housing Market Index (consensus 51; prior 51)
- 10:30 ET: Weekly crude oil inventories (prior -1.36 mln)
- 16:00 ET: March net long-term TIC flows (prior $71.5 bln)