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Financial Markets 05/29 15:47
Wall Street pushed further into the record books Friday, as the major stock
indexes extended the market's recent winning streak and closed out a solid
month of gains.
The S&P 500 rose 0.2%, notching its seventh consecutive gain and ninth
straight winning week -- the longest such streak since 2023. The benchmark
index set an all-time high for the fourth day in a row.
The Dow Jones Industrial Average gained 0.7% and the Nasdaq composite added
0.2%. The Dow and Nasdaq also reached new heights after posting record highs
earlier in the week.
Big technology stocks have been behind much of the market's record-breaking
streak. Their pricey stock values give them more influence in directing the
market higher or lower. In May alone, technology stocks within the S&P 500 rose
more than 15%, while most of the sectors in the benchmark index actually lost
ground.
"The rally has been largely tech-led and supported by resilient earnings,
but the key question is whether it can be sustained," wrote Angelo Kourkafas,
senior global strategist at Edward Jones, in a research note.
Tech stocks also powered the market higher Friday. Microsoft rose 5.4% and
Broadcom gained 4.7%.
Dell Technologies surged 32.8% to lead all stocks in the S&P 500 after
delivering profits that blew past expectations. The company also raised its
outlook, citing powerful demand for AI computing.
Most other sectors in the S&P 500 lost ground Friday. Among the decliners:
Paramount Skydance fell 1.9%, Amazon.com dropped 1.2%, and Costco Wholesale
closed 3.9% lower.
Wall Street has been gaining ground against worries that the U.S. war with
Iran is worsening inflation and jeopardizing economic growth.
The U.S. and Iran are reportedly working toward a deal to extend a
ceasefire. That eased pressure on oil prices. The price for August delivery of
Brent crude, the international standard, fell 1.7% to settle at $91.12 per
barrel. It is still well above the $70 per barrel level in late February before
the war began. The price for a barrel of benchmark U.S. crude oil for July
delivery fell 1.7% to settle at $87.36.
Treasury yields held relatively steady as oil prices fell. The yield on the
10-year Treasury slipped to 4.44% from 4.45% late Thursday.
Still, high oil prices remain a key concern for Wall Street. The war has
stifled the flow of oil shipments through the Strait of Hormuz. Roughly a fifth
of the world's oil and natural gas is shipped through the waterway.
That has pushed up prices for gasoline and a wide range of goods, feeding
inflation and squeezing consumers and businesses. Prices were already rising
before the war began from the ongoing impact of tariffs.
Several reports this week reflected inflation's rise and impact on
consumers. A measure of inflation preferred by the Federal Reserve accelerated
in April to its highest level in three years. Consumer confidence is slipping
amid the squeeze from rising inflation.
Wall Street's worries about rising inflation have been somewhat muted by the
latest round of corporate profit reports. Companies in the S&P 500 have
reported profit growth of 28% overall for the most recent quarter, according to
FactSet. The overwhelming majority of companies in the S&P 500 have already
reported their latest results. That could mean investors' focus may shift back
toward inflation, consumers' behavior and the Fed's path ahead for interest
rates.
The Fed has been holding its benchmark interest rate steady as it closely
watches rising inflation. It is expected to continue holding rates steady at
its next meeting in June and through the year, according to CME's FedWatch
tool. Cutting interest rates could help lower borrowing costs and give the
economy a jolt, but it could also worsen inflation at time when prices are
already high and rising.
Despite the market turbulence caused by the conflict in the Middle East,
stocks notched further gains in May. The S&P 500 closed out the month with a
5.1% gain. It's up 10.7% so far this year.
All told, the S&P 500 rose 16.43 points to 7,580.06 on Friday. The Dow
gained 363.49 points to 51,032.46, and the Nasdaq added 55.15 points to finish
at 26,972.62.
Markets in Europe and Asia mostly rose.
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