Mid-Week Market Minute 5.29.24

Market Updates

Stocks Slip; Homes Prices Reports

Stocks slipped early in this holiday-shortened trading week as rising Treasury yields seemed to pressure the broader market. Despite a sluggish start to the week, major averages are on pace to post impressive gains for May on the back of stronger-than-expected first-quarter earnings. Heading into Wednesday, the S&P 500 was up more than 5% for May, while international developed, emerging market, and small cap stocks each were higher by more than 4%. In bonds, Treasury yields crept higher this week with the yield on the 2-year and 10-year Treasury notes trading around 4.97% and 4.60%, respectively, mid-week.

Shares of Nvidia continued to move higher following another quarter of impressive earnings last week as the investor appetite for AI beneficiaries remains insatiable. Over the three trading days following the earnings report, Nvidia has rallied roughly 20%, which equates to a roughly $500 billion in added market cap, approaching Apple as the second-largest company in the world. 

In a relatively quiet week on the data front, investors got a glimpse into the housing market on Tuesday with two separate reports on home prices. Both the Case-Shiller and FHFA reports showed housing prices up 6.5% and 6.8%, respectively, over the past year, despite 30-year fixed mortgage rates currently hovering north of 7%. The more closely followed report this week will come in the form of PCE inflation on Friday. The Core PCE Deflator is expected to show prices rose 2.8% over the past year, unchanged from last month’s number. Both the markets and the Fed continue to keep a close eye on inflation, and a softer-than-expected inflation number could help give the central bank confidence to begin cutting interest rates in the second half of this year. 

Source: GSAM, CNBC, JPMorgan

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