Quick Overview
- Nasdaq Hits Record High: Nasdaq closed at 16,920.79, a 1.1% increase, marking its 11th record of the year.
- Nvidia’s Surge: Nvidia shares rose 2.6%, crossing the $1,000 mark, with a 15% weekly gain.
- Fed Rate Cut Speculations: Goldman Sachs delayed its rate cut forecast to September, with less than 50% probability of a cut.
- Tech Sector Gains: AMD (+3.7%), Intel (+2.1%), Meta (+2.7%), and Netflix (+1.7%) contributed to Nasdaq’s rise.
- Oil Prices and Market Volatility: U.S. crude and Brent saw weekly declines of 3.2% and 2.5%, respectively.
On May 24, 2024, the Nasdaq Composite celebrated a new milestone, closing at 16,920.79, marking a 1.1% increase for the day. This achievement highlights the continued strength and resilience of the tech-heavy index, which has now reached its 11th-record close of the year. The S&P 500 also joined the upward march, closing at 5,304.72, a 0.7% rise, reflecting a generally positive sentiment across the market. Meanwhile, the Dow Jones Industrial Average slightly increased, closing at 39,069.59, which was only a modest gain of 4.3 points or 0.01%.
Weekly Performance Overview
The week ending May 24 showcased varied performance across major indices. The Nasdaq led the charge with a 1.41% gain, while the S&P 500 experienced a modest uptick of 0.03%. In contrast, the Dow Jones Industrial Average suffered a setback, posting a 2.33% loss, marking its first negative week in five. These mixed results underscore the diverse influences in the current market environment.
Nvidia’s Remarkable Ascent
Nvidia was the star of the day, as its shares soared by 2.6% on Friday, buoyed by an overwhelmingly positive earnings report. This enthusiasm propelled Nvidia’s stock past the $1,000 mark for the first time, closing at 1,064.69 and even reaching 1,102.23 in after-hours trading. Nvidia’s impressive 15% weekly gain reflects investor confidence in its prospects and pivotal role in driving the tech sector forward.
David Mericle, an economist at Goldman Sachs, provided insight into Nvidia’s success: “Inflation is likely to be much improved by September, but hardly perfect…” This sentiment aligns with the broader market optimism and the anticipated resilience of tech stocks amidst economic fluctuations.
Federal Reserve Rate Cut Expectations
The financial world speculates about the Federal Reserve’s next move. Goldman Sachs recently revised its forecast, delaying the expected first rate cut from July to September. The CME FedWatch Tool indicates that the probability of a rate cut in September is less than 50%, reflecting uncertainty about the Fed’s future actions. This cautious outlook is tied to the ongoing efforts to tame inflation, with improvements anticipated by September, though not to perfection.
Tech Sector Shines Brightly
The tech sector continued to shine on May 24 with several notable performances. Advanced Micro Devices (AMD) saw a 3.7% increase, Intel rose by 2.1%, and Meta and Netflix posted gains of 2.7% and 1.7% respectively. These robust performances contribute to the Nasdaq’s record-setting momentum and underscore the sector’s pivotal role in the current market landscape.
Communication Services and Sector Dynamics
Communication services also had a strong showing, with a 1.1% gain on the day. News Corporation led the charge with a 3.2% increase, followed closely by Live Nation, which rose by 3%. These gains highlight the sector’s positive sentiment and contribution to the broader market’s upward trajectory.
Oil Prices Rebound Amid Market Fluctuations
Oil prices experienced a rebound on May 24 despite trending towards a weekly loss. U.S. crude oil hit an intraday low of $76.15, while the global benchmark Brent reached a low of $80.65. U.S. crude was down 3.2% for the week, and Brent saw a 2.5% decline. These fluctuations reflect the ongoing volatility in the energy markets, influenced by many global economic factors.
Signs of Market Broadening
Ross Mayfield, an analyst at Baird, commented on the current market dynamics, observing signs of broadening that suggest a healthier economy. “While concentrated markets have not historically led to bad returns…” Mayfield noted the increasing diversity in market participation and the potential for more sustainable growth moving forward.
Weekly Winners and Losers in the S&P 500
The S&P 500 saw significant movement among its constituents. First Solar emerged as the top performer with a 39% weekly gain, its best since April 2013. Meanwhile, Moderna followed with a 27% increase. Additionally, Deckers Outdoor, Nvidia, Analog Devices, Enphase Energy, and Constellation Energy posted gains of 8% or more.
On the downside, Nordson Corporation and Dayforce each fell by 12%. Similarly, Walgreens Boots Alliance, Target, and Lululemon Athletica saw declines of 9% and 11%, respectively.
On May 24, 2024, the financial landscape was marked by notable highs and lows. The Nasdaq Composite achieved a record close amidst strong tech performances and shifting economic expectations. Nvidia’s exceptional rise and ongoing speculation about Federal Reserve rate cuts contributed to this dynamic. Furthermore, mixed-sector performances paint an evolving market picture.
As investors navigate these waters, they will note signs of market broadening. Additionally, the resilience of tech stocks offers a glimmer of optimism for the future.
