The stock market has been extremely volatile over the past few months amid concerns about the Federal Reserve’s interest rate increases, lingering supply chain disruptions, and a potential economic slowdown. However, the core personal consumption expenditures price index grew 4.9% year-over-year in April, down from 5.2% reported in March. The May inflation data report is expected to be a catalyst for the market because some economists believe that the latest CPI level might be slightly lower than April, and if so could confirm that inflation has peaked.
"The growth engine of the U.S. economy is still alive and kicking, and that's important. Growth estimates for (the second quarter) are still good. There is a better tone in the market than we have seen in recent weeks, in terms of inflation possibly peaking here. Maybe we can avoid stagflation," said Joe Quinlan, Head of CIO Market Strategy for Merrill and Bank of America Private Bank. Yesterday, the market indices rallied as the leading growth stocks reported gains. Over the past month, the Nasdaq Composite has gained 3.8%, while S&P 500 has improved by 3.3%.
