All three major Wall Street indexes posted solid gains on Friday, with the technology sector leading the gains, while optimism for a US debt limit deal grew.
In early trading today, the US stock market found support in US consumer confidence data releases, with the University of Michigan index pulling away from the 6-month low seen in the count initial of May. Coupled with excitement in the tech industry over developments in artificial intelligence, concerns over data that showed the Federal Reserve’s favorite inflation gauge strengthened again in April were quickly overblown. .
So, on the board of directors, the industrialist Dow added 1% or 328 points to 33,093.34, whichever is wider S&P500 rose by 1.3% to 4,205.45 points and the technological share Nasdaq gained 2.19% to 12,975.69 points.
From 30 actions which make up the industrial index, 23 closed with a positive sign and 7 with a negative sign. At the top with gains of 5.84% is Intel, followed by American Express at +4.12% and Salesforce, Goldman Sachs, Microsoft and Home Depot all at over 2%. At the bottom of the scale was Merck with a decline of 1.1%.
In weekly basis the picture was mixed: the Dow Jones fell 1%, the S&P 500 gained 0.3% and the Nasdaq added 2.5% for its fifth consecutive week of gains.
Tech stocks remained on positive momentum, fueled by developments in artificial intelligence, emerging as the Wall’s next big thing. Today, the microchip maker Marvell Technology He did rally 32% following estimates that artificial intelligence will double the company’s revenue this fiscal year. We note that the Nasdaq has jumped about 24% since the beginning of the year.
In the American debt front, a White House official said negotiators are expected to reach an agreement on Friday (US time) to raise the US government’s debt ceiling to $31.4 trillion. dollars, but negotiations could continue over the weekend.
Earlier, it was announced by the White House that Joe Biden and Republican Speaker of the House of Representatives Kevin McCarthy are close to an agreement to increase the federal government’s borrowing limit for two years. The agreement would cap government spending on most spending categories beyond the armed forces and veterans over the same period.
The White House is also considering making the concession to cut funding to the Internal Revenue Service (IRS) to tighten controls on high-income citizens as part of the deal, according to the same source.
“It’s a little relief from the debt ceiling,” Ryan Belanger, founder and CEO of Claro Advisors, said in a phone interview.
“Once all this drama subsides, I think everyone will look to the central bank moves,” said Invesco analyst Kristina Hooper.
A slight recovery was presented by consumer confidence in May in the United States, according to the final count, but Americans remain worried about the future of the economy. In particular, the consumer confidence index compiled by the University of Michigan came in at 59.2 points, a performance that moves it away from the six-month low of 57.7 points recorded earlier in May. However, the index was well below April’s 62 units.
An indicator of current economic conditions came in at 64.9 from 64.5 in the initial reading in May, from 68.2 in April, while an indicator of consumer expectations for inflation over the next six month strengthened to 55.4 points from 53.4 points.
THE data on the Fed’s preferred index for inflation they confirmed what central bank officials warned of continued upward pressures despite more than a year of aggressive U.S. interest rate hikes to bring inflation back to its 2% target.
In particular, the personal consumption expenditure price index rose 0.4% in April after a slight rise of 0.1% in March, complicating the Fed’s decision to continue raising interest rates during of the June meeting. In addition, the year-on-year rise in the index stood at 4.4% from 4.2% in March, according to government data released today.
At the structural level, excluding energy and food, which show strong variations, the index also rose by 0.4% in April after rising by 0.3% in March. The annual index strengthened to 4.7% from 4.6% in March.
More encouraging is the situation of consumer spending, which rose more than expected in April, strengthening the outlook for economic growth.
“The consumer is holding up,” said Victoria Fernandez of Crossmark Global Investments. “I don’t think we want to underestimate consumers’ ability to continue spending, even if they are spending less.”
For now, optimism about the debt ceiling and enthusiasm for artificial intelligence are outweighing concerns about another Fed rate hike, according to Fernandez. “I just don’t think there’s the dramatic drop in demand that the Fed is looking for right now,” she said, as the jobless rate remains low.
Fernandez thinks the Fed could pause rate hikes in June to assess the economy before potentially raising rates again in July.
Moreover, the orders for processed products climbed last month in the United States, with the business investments show a sharp rise in an encouraging sign for the trajectory of the economy. In particular, orders rose 1.1% in April, defying analyst estimates of a 0.8% decline. In a positive sign, non-defence capital goods orders, an indicator of the trajectory of business investment, rose 1.4%.
In the meantime, US trade deficit jumped 17% of goods in April and hit a six-month high of $96.8 billion as imports rebounded strongly and the country’s exports declined. In March, the deficit was $82.7 billion.
Specifically, exports fell 5.5% to $163.3 billion, while imports rose 1.8% to $260 billion in April, according to data released today by the US Census. Desk.