Friday’s S&P 500 Index (SP500) Add 0.03% It closed the week at 5,304.72 points, rising in three of five trading days. Its accompanying SPDR S&P 500 ETF Trust (New York Stock Exchange: Spy) is basically unchanged this week.
Benchmark index barely holds on Due to the Memorial Day holiday, the team had won five weeks in a row heading into the three-day weekend, its longest winning streak since early February.
However, the S&P 500 (SP500) has stalled since hitting a new closing high on Tuesday, with its weekly gains capped by growing uncertainty among market participants over expectations for a rate cut from the Federal Reserve.
Wall Street hit record highs last week, with the S&P 500 and the blue-chip Dow Jones Industrial Average (DJI) topping 5,300 and 40,000 points respectively, both hitting record highs.
While traders didn’t see big moves ahead of chip giant Nvidia’s (NVDA) much-anticipated quarterly results, the momentum was largely maintained on Monday and Tuesday earlier in the week.
Despite sky-high expectations, Nvidia (NVDA) shocked Wall Street once again with a blowout performance. The Jensen Huang-led company’s fiscal first-quarter results showed a staggering 427% year-over-year growth in data center revenue, underscoring seemingly insatiable demand for the company’s chips that power artificial intelligence (AI) processes.
Nvidia (NVDA) shares are up more than 9%, adding nearly $220B to its market cap on Thursday alone. Gains in the Nasdaq (COMP:IND) also helped the Nasdaq close the week at a record high.
However, Nvidia’s (NVDA) performance was countered by Fed comments and economic data, which continued to dampen rate cut expectations.
Minutes from the Federal Reserve’s latest interest rate meeting on Wednesday showed that many participants were unsure whether policy was tight enough and were willing to raise rates further if necessary. Then, on Thursday, the S&P Global Report pointed out that despite higher interest rates, U.S. inflation remains high and business activity is growing strongly, which the Federal Reserve does not want to see.
“The latest FOMC minutes and a series of Fed officials’ speech tours this week provide more evidence that a rate cut this summer is unlikely. Overall, the Fed’s communication pipeline Conveying a sense that monetary policy is being transmitted through the economy at a faster pace.
Attention now turns to personal income and spending data for next week due on Friday. The report will include an interpretation of the Fed’s preferred inflation measure, the core personal consumption expenditures price index.
As for the weekly performance of the S&P 500 (SP500), 9 of 11 sectors ended in the red. The energy and real estate sectors were the biggest decliners, both down nearly 4%. Technology and communications services are the two big winners. See below a breakdown of the performance of each sector and its accompanying SPDR Select Sector ETF from May 17 to the close of May 24:
#1: Information Technology +3.44%and Technology Select Sector SPDR Fund ETF (XLK) +1.59%.
#2: Communication Services +0.25%and Communications Services Select Sector SPDR Fund (XLC) +0.41%.
#3: Industrial -0.68%and the Industrial Select Sector SPDR Fund ETF (XLI) -0.69%.
#4: Materials -0.86%and the Materials Select Sector SPDR Fund ETF (XLB) -0.86%.
#5: Utilities -1.16%and the Utilities Select Sector SPDR Fund ETF (XLU) -1.16%.
#6: Healthcare -1.31%and the Healthcare Select Sector SPDR Fund ETF (XLV) -1.29%.
#7: Consumer Staples -1.32%and the Consumer Staples Select Sector SPDR Fund ETF (XLP) -1.42%.
#8: Consumer Discretionary -1.85%and the Consumer Discretionary Select Sector SPDR ETF (XLY) -1.77%.
#9: Finance -1.97%and the Financial Select Sector SPDR Fund ETF (XLF) -2.07%.
#10: Real Estate -3.70%and the Real Estate Select Sector SPDR Fund ETF (XLRE) -3.64%.
#11: Energy -3.82%and the Energy Select Sector SPDR Fund ETF (XLE) -3.78%.
For investors keeping an eye on future developments, check out Seeking Alpha Catalyst Watch for details on the actionable events that stand out next week.
