Stock market today: US indexes rally after cool inflation data

Stock market today: US indexes rally after cool inflation data

1.US indices rallied after a promising PCE report.

2.The S&P 500 and Dow rallied, while the Nasdaq traded mostly flat.

US indexes finished mostly higher on Friday after a key inflation metric left investors encouraged.

The S&P 500 and Dow Jones Industrial Average rose, while the Nasdaq Composite was flat. Nvidia, Microsoft, and Amazon all fell.

Friday's also offered investors inflationary relief, as the Personal Consumption Expenditures report came in line with expectations. As projected, core PCE rose 0.2% in April. On an annualized basis, it increased 2.8%, slightly above consensus of a 2.7% gain.

""The equity market wants to see a slowdown in economic growth and today's PCE data provided a soft-landing report," David Donabedian said, chief investment officer of CIBC Private Wealth US.

That means it's still possible for the Federal Reserve to cut interest rates this year. Adding to this notion was last week's downward GDP revision, which showed that consumer spending was softer-than-thought.

"The revised GDP report released on Thursday should also keep the possibility of 1 – 2 rate cuts on the table this year as consumer spending cooled in the first quarter. While these latest economic reports may keep the bulls running within US large caps, US small cap companies, which are more rate sensitive, may remain stalled until we have a better indication of when the first rate cut will occur," Eric Sterner, CIO at Apollon Wealth Management, said.

Here's where US indexes stood at the 4:00 p.m. closing bell on Friday:

S&P 500: 5,277.51, up 0.8%

Dow Jones Industrial Average: 38,686.32, up 1.5% (575 points)

Nasdaq Composite: 16,735.02, down less than 0.1%

Here's what else happened today:

Why investors should buy the dip before next week's jobs report, according to Fundstrat's Tom Lee.

Two companies made up 24% of Nvidia's revenue in the first quarter. One might be Microsoft, UBS says.

Tariff-caused inflation could hold back Fed interest rates, S&P Global says.

Trump Media fell 9% after the former president's felony conviction.

In commodities, bonds, and crypto:

West Texas Intermediate crude oil slumped by 1.41% to $77.10 a barrel. Brent crude, the international benchmark, slid 0.71% to $81.29 a barrel.

Gold fell 1.12% to $2,371 an ounce.

The 10-year Treasury yield slid five basis points to 4.49%.

Bitcoin dropped 1% to $67,651.

Here are some important terms commonly used in the stock market:

1. **Stock**: A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.

2. **Share**: A unit of ownership in a corporation or financial asset.

3. **Bull Market**: A financial market in which prices are rising or are expected to rise.

4. **Bear Market**: A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining.

5. **Dividend**: A portion of a company's earnings that is paid to shareholders, typically on a quarterly basis.

6. **Market Capitalization (Market Cap)**: The total market value of a company's outstanding shares of stock. It is calculated by multiplying the current stock price by the total number of outstanding shares.

7. **Initial Public Offering (IPO)**: The process by which a private company can go public by sale of its stocks to general public for the first time.

8. **Price-to-Earnings Ratio (P/E Ratio)**: A valuation ratio of a company's current share price compared to its per-share earnings.

9. **Volatility**: A statistical measure of the dispersion of returns for a given security or market index. High volatility means a stock's price can change dramatically over a short period of time in either direction.

10. **Liquidity**: The ability to buy or sell an asset quickly without significantly affecting its price.

11. **Blue Chip Stocks**: Shares in large, well-known companies with a history of financial stability and reliable performance.

12. **Bearish**: An investor who believes that a particular security, or the overall market, is headed downward.

13. **Bullish**: An investor who believes that a particular security, or the overall market, is headed upward.

14. **Broker**: An individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor.

15. **Exchange-Traded Fund (ETF)**: A type of investment fund and exchange-traded product, meaning they are traded on stock exchanges. ETFs hold assets such as stocks, commodities, or bonds and generally operate with an arbitrage mechanism designed to keep trading close to its net asset value.

16. **Short Selling**: The sale of a security that the seller has borrowed, with the intention of buying it back later at a lower price.

17. **Portfolio**: A range of investments held by a person or organization.

18. **Index**: A statistical measure of the changes in a portfolio of stocks representing a portion of the overall market. Examples include the S&P 500, Dow Jones Industrial Average (DJIA), and NASDAQ.

19. **Bid Price**: The highest price that a buyer is willing to pay for a security.

20. **Ask Price**: The lowest price at which a seller is willing to sell a security.

21. **Yield**: The income return on an investment, such as the interest or dividends received from holding a particular security.

22. **Capital Gains**: The profit earned from the sale of an asset like stocks, bonds, or real estate.

23. **Day Trading**: The act of buying and selling financial instruments within the same trading day.

24. **Margin**: Borrowing money from a broker to purchase stock, using the investment as collateral.

25. **Mutual Fund**: An investment program funded by shareholders that trades in diversified holdings and is professionally managed.

These terms provide a foundational understanding of various concepts and activities within the stock market.

Latest Stock Market News As Per 31st May 2024

As of May 31, 2024, the stock market is facing significant anticipation and anxiety. Investors are closely watching the April Personal Consumption Expenditures (PCE) inflation report, due to be released today. This report is seen as a critical indicator for future Federal Reserve rate decisions. Recent encouraging data from the Consumer Price Index (CPI) has lifted hopes for potential rate cuts, but the PCE report will be crucial in confirming this trend [[❞]](https://www.hindustantimes.com/business/stock-market-will-fall-20-30-from-2024-peak-predicts-jp-morgan-report-101707509289011.html) [[❞]](https://investorplace.com/2024/05/stock-market-crash-alert-mark-your-calendars-for-may-31/).

Additionally, a recent report from JP Morgan has warned of a potential market correction, predicting a 20-30% decline from the 2024 peak. This forecast adds to the cautious sentiment among investors [[❞]](https://www.hindustantimes.com/business/stock-market-will-fall-20-30-from-2024-peak-predicts-jp-morgan-report-101707509289011.html).

Overall, today's PCE report is expected to be a major market mover, with the potential to either bolster confidence in a rate cut scenario or dampen it significantly if the inflation data is less favorable [[❞]](https://investorplace.com/2024/05/stock-market-crash-alert-mark-your-calendars-for-may-3 1/).

Various outcomes for the stock market influenced by political and economic factors as of May 2024:

Recent polls and analyses suggest various outcomes for the stock market influenced by political and economic factors as of May 2024:

1. **Bullish Long-term Outlook**: A poll highlighted by the Hindustan Times indicates a positive outlook, predicting that the stock market may rise over 10% by the end of 2024, driven by strong fundamentals and investor confidence [[❞]](https://www.hindustantimes.com/business/stock-market-to-hit-new-highs-may-rise-over-10-by-2024-end-poll-101700661553636.html).

2. **Election Impact**: According to a study mentioned by Livemint, the Indian stock market typically shows increased volatility around election periods but has historically performed well in the run-up to elections. This trend is supported by data showing significant returns in the months leading up to previous elections [[❞]](https://www.livemint.com/market/stock-market-news/general-elections-2024-market-volatility-expected-around-poll-results-but-long-term-outlook-remains-bullish-says-study-11710482199538.html). Conversely, a report from Business Today highlights the potential downside risks if the incumbent BJP fails to retain power in the 2024 general elections, suggesting a possible market correction of up to 25% due to political uncertainty [[❞]](https://www.businesstoday.in/markets/market-commentary/story/elections-2024-stocks-may-fall-25-if-nda-fails-to-retain-power-says-chris-wood-403920-2023-10-31).

3. **Sector-Specific Optimism**: Certain sectors are expected to benefit from government initiatives and spending. Railways, defense, and public sector banks are among the sectors projected to perform well, driven by substantial capital expenditure and government policies aimed at infrastructure development and self-reliance [[❞]](https://www.livemint.com/market/stock-market-news/general-elections-2024-market-volatility-expected-around-poll-results-but-long-term-outlook-remains-bullish-says-study-11710482199538.html) [[❞]](https://www.businesstoday.in/markets/market-commentary/story/elections-2024-stocks-may-fall-25-if-nda-fails-to-retain-power-says-chris-wood-403920-2023-10-31).

These perspectives indicate that while short-term volatility is expected around the elections, the overall long-term market sentiment remains positive, supported by strong economic fundamentals and specific sectoral growth.

Thank You For Giving Your Time To Our Newsletter. We Hope That You Would Have Found Something Useful.

The Insider Inc. Team