Wall Street breaks 7-week losing streak — longest since 2001

Shares rose on Wall Street on Friday and closed the rise for the week, breaking a seven-week streak of losses, the longest stretch since 2001.

The S&P 500 rose 100 points, or 2.5%, to close at 4,158, raising its week-long gain to 6.6%. This is the largest weekly earnings of the benchmark index since November 2020. Technology stocks were a major factor driving the market up. As a result, the Nasdaq composite was up 3.3%. The Dow Jones Industrial Average rose 1.8%.

The gains were wide, led by technological actions. Apple rose 3.3% and Microsoft 1.8%. Retailers also made solid gains as Wall Street continues to review the latest round of earnings to get a better idea of ​​the pain caused by rising inflation for businesses and consumers. Beauty products company Ulta Beauty rose 10.3% after boosting its profit forecast for the year. Amazon rose 2%.

Inflation growth?

Investors received potentially encouraging news about inflation. The Commerce Department said inflation rose 6.3% in April from a year earlier first slowdown since November 2020 and a sign that high prices may finally moderate, at least for now.

This is in addition to other recent signs that, although high inflation may be moderating. Another key indicator of inflation, the consumer price index, rose 8.3% from a year ago, below 8.5% in March; first slowdown in inflation in nine months.

The report was released when Wall Street looked for any signs that inflation could be reduced, while trying to figure out how far stocks could sink.

“Right now, that’s all the market needs,” said Ross Mayfield, Baird’s investment strategy analyst. “It’s definitely one of the signs you’d like to see.”

The market as a whole has been falling for almost two months as worries about inflation and rising interest rates have accumulated. Investors were frightened last week by disappointing reports from major retailers, including Walmart and Target, which fueled fears about rising inflation affecting profit margins and consumer spending.

Trading remained hectic throughout the week, although the market has grown mostly as retailers like Macy’s and Dollar General released encouraging earnings reports and financial updates.

Inflation has been at its peak for four decades and has been constantly putting pressure on companies. Higher costs drove companies to raise prices from everything from food to clothing to protect their margins and consumers remained resilient. Russia’s invasion of Ukraine worsened the inflation outlook by further rising world energy and food prices.

U.S. crude oil prices were relatively stable, but rose more than 50 percent in 2022. Wheat prices have risen about 50 percent and corn prices have risen 30 percent this year.

The additional pressure of inflation has made it even more difficult for companies to offset costs and appears to be causing a shift in consumer spending on expensive items and on needs. He also expressed concern that the Federal Reserve may have even more difficulty trying to moderate the impact of inflation.

The Fed is aggressively raising interest rates to fight inflation, but investors are worried that it could push the economy into recession if it moves too aggressively.

“Amid growing pessimism about the state of the American consumer, today’s report provides some reassurance that the mainstay of the economy remains strong in the face of historic inflation and rising costs. loans, “said Lydia Boussour, chief economist at Oxford Economics. said in a report on the latest spending and inflation data. “But there is a bumpy road for the US economy, which we hope will slow down significantly by 2023.”

In:
• Economy
• Stock Market
• Gas prices
• Inflation