Stocks finished mixed on Friday, with the Dow marking its eighth straight winning session and the best week of 2024.
The Dow Jones Industrial Average gained 125.08 points, or 0.32%, 39,512.84, while the S&P 500 climbed 0.16% to 5,222.68, the tech-heavy Nasdaq edged 0.03% lower to 16,340.87.
For the week, the Dow posted a 2.16% gain for the period, its best week since December and its fourth positive week in a row, CNBC reported.
The S&P 500 and the Nasdaq Composite both posted a third consecutive winning week, rising 1.85% and 1.14%, respectively.
Stocks took a hit earlier in the session after the University of Michigan's benchmark consumer sentiment survey for the month of May showed fading confidence and an uptick in inflation prospects.
“Although the inflation data have overshadowed the consumer confidence – and most other economic – data this year, it’s important to remember that consumer spending is the main pillar that has been holding up the economy these past few years,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.
Zaccarelli said the lower-than-expected consumer sentiment numbers “are a warning sign that the consumer shouldn’t be taken for granted.”
“In addition, inflation expectations have been rising as well, which is a double whammy for the Fed,” he said.
If spending slows down and inflation increases, Zaccarelli said “we’ll get the opposite of the Goldilocks scenario that many were hoping for, and the Fed will be in an especially difficult position of choosing between accommodating a slowing economy and fighting increasing inflation expectations.”
Updated at 1:00 PM EDT
Chips in
Micron Technology (MU) and Nvidia (NVDA) are two notable movers heading into the final hours of trading following a surprisingly firm April sales update from contract chip manufacturer Taiwan Semiconductor.
The surprise April gains followed last month's muted first quarter earnings report from TSMC, which held its capital spending plans in place and trimmed its 2024 chip revenue forecast to just under 10% in U.S. dollar terms.
Nvidia was last marked 1.3% higher at $898.55 each while Micron rose 1.9% to $120.00 each.
Related: Nvidia shares get boost from key supplier ahead of earnings
Updated at 10:43 AM EDT
Late morning slip
Stocks are holding onto their earlier gains, but paring some of that advance following the UM consumer sentiment data and a nudge higher in Treasury bond yields.
The S&P 500 was last marked 8 points, or 0.16% higher on the session, while the rate-sensitive Nasdaq slipped 10 points into the red.
Big drop: May @UMich Consumer Sentiment Index down to 67.4 vs. 76.2 est. & 77.2 prior … current conditions down to 68.8 vs. 79 prior; expectations down to 66.5 vs. 76 prior pic.twitter.com/fxQUFLOGE3
— Liz Ann Sonders (@LizAnnSonders) May 10, 2024
Updated at 10:07 AM EDT
Sentiment fade
The University of Michigan's benchmark consumer sentiment survey for the month of May showed fading confidence and an uptick in inflation prospects, a reading that likely reflects the faster-than-expected CPI and PCE readings from the late spring.
Year-ahead inflation forecasts rose to 3.5% from 3.2%, the survey indicated, while the headline sentiment figure fell nearly 10 points from April to 67.4.
Ouch! Consumer sentiment tanks to just 67.4 from an estimated 76. Inflation expectations also pick up to 3.5%. Hold your wallets, Americans! #economy https://t.co/EB7abNb2S3
— Vance Ginn (@VanceGinn) May 10, 2024
Updated at 9:36 AM EDT
Solid start
The S&P 500 added 19 points, or 0.37%, in the opening minute of trading, while the Nasdaq was marked 70 points, or 0.43%, into the green.
The Dow, which is looking at its eighth consecutive session gain, was marked 130 points higher at 39,520 points.
S&P 500 Opening Bell Heatmap (May 10, 2024)$SPY +0.30% 🟩$QQQ +0.39% 🟩$DJI +0.30% 🟩$IWM +0.34% 🟩 pic.twitter.com/YKVsFg7IOB
— Wall St Engine (@wallstengine) May 10, 2024
Updated at 9:00 AM EDT
Big bond moves
Bank of America's "Flow Show" report notes the biggest weekly move into bond portfolios in nearly three years last week as investors see slowing growth and inflation prospects over the coming months.
The report suggested that a softer CPI reading next week, along with weakening ISM activity data for the month of April, could confirm that 'no landing' bets have peaked and the Fed could be compelled to cut rates later in the summer.
Stock Market Today
Stocks ended higher Thursday, with the S&P 500 now less than 1% from its March record high, after Labor Department data showed weekly jobless claims jumped to the highest levels since last summer.
The surprise tally, when paired with last week's softer-than-expected April jobs report, suggests cracks in the labor market that could ease inflation pressures and validate the case for the Fed to cut rates in September.
A trio of big Treasury auctions this week, including benchmark sales of 10-year notes and 30-year bonds, also drew solid demand from foreign investors. The successful sales soothed concerns about the government's surging deficit.
Benchmark 10-year note yields eased to 4.453% in the overnight session, while 2-year notes were pegged at 4.817% following the muted jobless claims reading.
CME Group's FedWatch tool, meanwhile, has nudged the odds of a September Fed rate cut to around 68.5%, although San Francisco Fed President Mary Daly cautioned last night that their is still "considerable uncertainty" in the overall inflation backdrop.
"In a scenario where inflation doesn't make much further progress, then it's not appropriate to start adjusting the rate unless we see the labor market faltering, which it's not showing any signs of doing," Daly told an event at George Mason University in Fairfax, Va.
Related: S&P 500 aims for biggest gain in Fed interest rate pause history
With the bulk of the first-quarter-earnings season behind them, investors are now likely to shift focus to next week's initial inflation readings for April, which will include the key CPI reading on May 15.
Heading into the start of trading on Wall Street Friday, stocks are set for a solid set of opening bell gains, with the Dow looking to extend its win streak to eight sessions.
Futures contracts tied to the S&P 500, which is now up 3.54% for the month, suggest an early 22-point gain while the Dow is called 145 points higher.
The tech-focused Nasdaq, which is up 4.4% for the month, is likely to get another upside boost from falling Treasury yields and is called 95 pints higher.
More Wall Street Analysts:
- Analyst unveils new Nike price target ahead of big summer for sports
- Analysts weigh in on Google-parent Alphabet’s stock after cloud event
- Analysts revamp Disney stock price target after proxy fight
In overseas markets, Britain's FTSE 100 again hit an all-time high in early London trading. The benchmark was last marked 0.83% higher on the session, following yesterday's dovish Bank of England rate decision and data showing the best first-quarter GDP growth rate in nearly three years.
The regionwide MSCI ex-Japan index, meanwhile, rose 0.87% in early Frankfurt trading.
Overnight in Asia, Japan's Nikkei 225 ended 0.41% higher at 38,229.11 points in a follow-on rally from last night's close on Wall Street, pegging the index flat for the week following two prior weekly advances.
The regional MSCI ex-Japan index was marked 0.97% higher into the close of trading.
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