Last-minute stock rally makes for merry start to May

A late rebound in major technology stocks wiped out a fall on Wall Street in the afternoon and left major indices moderately higher, following a brutal April in which widespread technology sales dragged down major benchmark indices.

The S&P 500 was up 0.6%, accelerating in the afternoon to close at 4,155. The Dow Jones Industrial Average was up 0.3% during the day and the high-tech Nasdaq was up 1.6%.

“‘Come in May and go’ is probably the most quoted stock market cliché in history,” LPL chief financial market strategist Ryan Detrick said in a research note. “The S&P 500 index closed higher in May in eight of the last nine years, so ‘selling in June’ might be more appropriate.”

Household goods companies and retailers had heavy losses near closing, but rebounded in out-of-hours operations. Procter & Gamble rose 0.2%. Shares of Amazon ended the day with a 4.4% increase, but continue to fall below 0% in the secondary market. Amazon warehouse workers in New York City voted against forming a union Monday, giving a hit to the organizers who last month achieved their first success US organizing effort in the story of the retail giant.

Technological stocks also rebounded at the end of the day. Many companies in the sector have high stock values ​​and therefore have more strength when it comes to boosting or lowering major indices. Apple closed at 0.2%.

Several large communications companies gained ground. Facebook’s parent company, Meta, rose 5.3%.

The positive start to May follows a sad April, where high-tech companies dragged the wider market down as they began to look too expensive, especially with interest rates that had to rise sharply. .

US crude oil prices remained relatively unchanged after falling earlier in the day. European energy ministers meet in Brussels to discuss Russian supply issues and sanctions. The Russian invasion of Ukraine caused a jump in already high oil and natural gas prices.

Bond yields increased significantly. The 10-year Treasury yield stood at 2.98% after rising briefly to 3.00% from 2.89% on Friday afternoon. It has not been above 3% since December 3, 2018, according to Tradeweb.

Treasury yields have been rising year-round as investors prepare for higher interest rates. Markets expect a huge rise in interest rates this week The Federal Reserve is trying to control inflationwhich is in his highest level in four decades.

The central bank is expected to raise short-term interest rates twice as much as usual when it released its latest statement on Wednesday. It has already raised its key rate to one day once, the first such increase since 2018, and Wall Street expects several major increases over the coming months.

Fear of Fed-driven turmoil

Fed rate hikes will increase the costs of credit cards, car loans and mortgages. Investors have been worried about rising inflation and its impact on businesses and consumers. But they are also concerned about how interest rates will rise in the fight against inflation and whether a more aggressive Fed could hurt economic growth.

Concerns about rising inflation have also been on the rise in the latest round of business gains. The disappointing results or prospects of Apple, Alphabet, Google’s parent company and Amazon helped fuel market sales last week. Investors are reviewing the latest results and statements to assess the extent to which rising costs have affected operations and whether price increases have hampered sales.

“The central question for investors is whether the Fed can bring inflation and growth closer to the trend without causing a recession,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a statement. “We expect growth to be slower in 2022 than last year, but not towards recession. Our view remains that the right strategy is to position ourselves for inflation, a clear and present fact, rather than of the recession, which is still just a possibility. “