Today's trading session concluded with mixed results, despite the overall gains for the week. The S&P 500 edged up by 0.2% from yesterday, marking a 1.9% increase from the previous Friday. Conversely, the Nasdaq Composite experienced a slight decline from yesterday, although it still managed a weekly rise of 1.1%.
Market dynamics shifted following the release of the preliminary University of Michigan Index of Consumer Sentiment for May, which fell to 67.4 against expectations of 76.5. This report also highlighted a rise in inflation expectations for the coming year, increasing to 3.5% from 3.2%.
Reacting to the sentiment data, Treasury yields saw significant movement. The 10-year note yield rose by six basis points to settle at 4.50%, while the 2-year note yield also increased by six basis points, closing the week at 4.87%.
Major tech stocks like Apple (AAPL, Financial) initially saw gains but later reversed, with AAPL closing at $183.05, down by 0.8% despite peaking at a 0.3% increase earlier in the day.
Despite some indices pulling back from session highs, several sectors and stocks ended the day positively: - Consumer staples sector rose by 0.6% - Information technology and financials both increased by 0.5% - Health care sector saw a modest gain of 0.2% However, the consumer discretionary sector experienced the largest drop, declining by 0.6%.
The semiconductor industry received a boost from TSMC (TSM, Financial), which surged 4.5% to close at $149.26 after reporting a significant revenue increase in April. This helped the PHLX Semiconductor Index to gain 1.0%.
Year-to-date performance of major indices: - S&P 500: +9.5% - Nasdaq Composite: +8.9% - S&P Midcap 400: +7.6% - Dow Jones Industrial Average: +4.8% - Russell 2000: +1.6%
Today’s economic reports revealed a significant drop in the Consumer Sentiment Index for May to its lowest in six months, primarily due to increased concerns over inflation and unemployment. The Treasury Budget for April showed a surplus of $209.5 billion, an increase from last year's $176.2 billion, reflecting higher individual tax receipts indicative of a stronger economy.
No significant US economic data is scheduled for release on Monday. The focus next week will be on the Producer Price Index on Tuesday and the Consumer Price Index on Wednesday.
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Today's News
In a significant corporate shakeup, Xponential (XPOF, Financial) has suspended CEO Anthony Geisler following investigations by the U.S. Securities and Exchange Commission and the U.S. Attorney’s Office for California into allegations of securities fraud. The company has appointed Brenda Morris as the interim CEO. This move comes amid claims that the company misled investors regarding its financial health, including inflating sales metrics and failing to disclose unprofitable business models across its brands.
The Biden Administration is set to increase tariffs on electric vehicles (EVs) imported from China, which is expected to impact Chinese carmakers like Li Auto (LI, Financial), NIO Inc (NIO, Financial), XPeng (XPEV, Financial), and BYD (BYDDY, BYDDF). This decision aims to protect U.S. car manufacturers from cheaper Chinese EVs and is part of a broader strategy to counteract aggressive manufacturing growth in China. U.S. EV makers such as Tesla (TSLA, Financial), Rivian (RIVN, Financial), and Lucid (LCID, Financial) might also feel the effects of these policy changes.
Amidst legal turmoil, Exxon Mobil (XOM, Financial) has been ordered to pay $725M in a lawsuit where a former mechanic alleged his cancer was caused by exposure to toxic chemicals at work. This verdict highlights ongoing concerns about the health impacts of benzene, a known carcinogen, and could influence future litigation against the company.
McDonald’s (MCD, Financial) is reintroducing a $5 Meal Deal in an effort to attract lower-income consumers back to its restaurants, despite the resistance from franchisees worried about high labor costs. This strategy reflects the company's broader efforts to boost traffic and profitability through value offerings, even as economic conditions pressure the fast-food sector.
Taiwan Semiconductor Manufacturing (TSM, Financial) reported a significant revenue increase, with a 59.6% surge in April year-over-year, driven by strong demand for chips used in various tech applications, including AI. This performance underscores TSM's pivotal role in the global semiconductor market, catering to major tech companies like Apple (AAPL, Financial), Nvidia (NVDA, Financial), and AMD (AMD, Financial).
Amid escalating concerns over high THC levels in cannabis, the DEA has reported a record high average THC percentage, which has grown significantly over the past year. This increase poses potential risks for users and continues to fuel the debate on the regulation and safety of cannabis products in the U.S.
Chimera Investment (CIM) announced a reverse stock split, aiming to reduce the number of outstanding shares and potentially stabilize its stock price. This financial maneuver reflects ongoing efforts to improve market perceptions and shareholder value amidst challenging economic conditions.
Bitcoin (BTC-USD) experienced a week of narrow trading ranges, reflecting a broader uncertainty in the cryptocurrency market. Despite initial gains early in the week, prices remained relatively stable, underscoring the volatile nature of digital currencies and their sensitivity to broader economic indicators and policy shifts.
Cassava Sciences (SAVA) reported a slight increase in shares following its latest quarterly earnings, which beat expectations. The company is actively engaging in extensive clinical trials for its Alzheimer’s drug, Simufilam, highlighting its ongoing commitment to addressing this challenging medical condition.
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