Yahoo Finance Stock Market News for May 7, 2024
Wall Street closed sharply higher on Monday, led by tech stocks. Optimism around interest rate cuts by the Fed dominated the proceedings of the day. All of the three major stock indexes ended in the green for the third straight session.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 176.59 points, or 0.5%, to close at 38,852.27. Twenty components of the 30-stock index ended in positive territory, while 10 ended in negative.
The tech-heavy Nasdaq Composite added 192.92 points, or 1.2%, to close at 16,349.25.
The S&P 500 advanced 52.95 points, or 1%, to close at 5,180.74. All of the 11 broad sectors of the benchmark index closed in the green. The Communication Services Select Sector SPDR (XLC), the Financials Select Sector SPDR (XLF) and the Technology Select Sector SPDR (XLK) gained 1.4%, 1.3% and 1.2%, respectively.
The fear-gauge CBOE Volatility Index (VIX) remained unchanged at 13.49. The S&P 500 recorded 29 new 52-week highs and two new lows while the Nasdaq posted 150 new highs and 54 new lows.
Rate-Hike Optimism Continues on Monday
Market participants burst into optimism late last week following a softer-than-expected jobs report. Nonfarm payrolls for April suggested that the U.S. economy could stay strong enough to avoid a recession as long as it is able to bring inflation in check.
Fed Chair Jerome Powell, at his press conference last week, reiterated that the Fed was pushing back strongly against further rate hikes to tackle inflation. Following this, markets are currently expecting two cuts to rates this year. The stubborn inflation that has characterized 2024 has been fanning fears that the economy may be moving toward stagflation. With rising optimism that the Fed would take cognizance of the overall state of the economy and go for a rate cut as early as September, markets have risen over the last three sessions.
This is a low data week. Most of the companies in the S&P 500 have already reported their results for the first three months of the year, with more than three-quarters topping profit expectations. The yield on the benchmark 10-year Treasury came down marginally to 4.49% from 4.50% late Friday. The two-year Treasury yield was also relatively little changed.
An optimistic stock market usually entails an upbeat tech sector. Consequently, shares of Advanced Micro Devices, Inc. AMD and Super Micro Computer, Inc. SMCI gained 3.4% and 6.1%, respectively. Super Micro Computer currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
No economic data was released on Monday.
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