The major stock market indices ended higher on Friday on account of solid earnings from the retail sector and a positive inflation report after registering more than seven weeks of continuous losses. The Federal Reserve inflation gauge rose 6.3% in April from its year-ago value, slightly below a four-decade high in March. However, according to Bill Adams, chief economist at Comerica Bank, "Inflation is finally slowing, but it's a little early for high-fives.” Moreover, since gas and food prices have increased in May and the Ukraine-Russia conflict and COVID-19-related lockdowns in China could further disrupt supply chains, it is expected that the prices could accelerate again in the future.
Despite Friday's rally, Fed's possible interest rate hikes to control inflation and recession fears prevailing in the broader market could continue to raise investors' concerns. According to a famous economist David Rosenberg, the S&P 500 will further crash by 17% to 3,300. Moreover, not all companies possess the required fundamentals to resist the market uncertainties and may be unable to dodge the market fluctuations.
