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Stock market today: Nasdaq sets another record as Wall Street wins back earlier losses

The Columbian
Published: May 24, 2024, 1:50pm

NEW YORK (AP) — U.S. stocks rose Friday in a bounce back from Wall Street’s worst day since April.

The S&P 500 gained 36.88 points, or 0.7%, to 5,304.72 and won back all its losses from the prior two days. It eked out a tiny gain for the week, enough to extend its weekly winning streak to five, and is sitting just below its record set on Tuesday.

The Dow Jones Industrial Average rose 4.33 points, or less than 0.1%, to 39,069.59, and the Nasdaq composite gained 184.76, or 1.1%, to 16,920.79 and topped its all-time high set earlier this week.

Deckers Outdoor jumped 14.2% for the biggest gain in the S&P 500 after reporting stronger profit and revenue for the latest quarter than expected. The company behind the Hoka, Ugg and Teva brands also gave a forecast for revenue this upcoming fiscal year that was in line with analysts’ expectations.

Ross Stores also lifted the market after leaping 7.8%. The retailer reported better profit for the latest quarter than analysts expected. That was despite its revenue only edging past expectations, as customers continue to hold back on purchases of non-essentials.

CEO Barbara Rentler said several challenges, “including prolonged inflation, continue to squeeze our low-to-moderate income customers’ purchasing power.”

Even though data on the overall, or macro, economy has been showing continued strength for spending by U.S. households, the numbers underneath the surface may not be as encouraging.

“Walmart and Target are telling us that high income consumers are doing fine, but beginning to trade down,” said Brian Jacobsen, chief economist at Annex Wealth Management. “The lower income consumer is struggling. Macro often focuses too much on the average and the average is skewed by the high-end household.”

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The market got a bit of a boost Friday from a report showing overall sentiment among U.S. consumers weakened by less in May than preliminary data had suggested. Perhaps more importantly, the report from the University of Michigan also said U.S. consumers’ expectations for inflation in the coming year rose by less in May than earlier feared.

That could help stave off a vicious cycle where high expectations for inflation among U.S. households drive them to behave in ways that only make inflation worse.

Worries about stubbornly high inflation were behind this week’s rocky trading, after indexes set records recently. The weakness began after the Federal Reserve on Wednesday released the minutes from its last policy meeting. It showed some officials talking about the possibility of raising rates if inflation worsens.

Stocks fell further after reports on Thursday indicated the U.S. economy is stronger than expected. Such strength can actually spook Wall Street because it could keep upward pressure on inflation.

That in turn could at least delay the Federal Reserve from giving relief to financial markets through cuts to its main interest rate, which is sitting at the highest level in more than 20 years. The Fed is trying to pull of the difficult feat of slowing the economy enough through high interest rates to stifle high inflation but not so much that it kneecaps the job market.

Goldman Sachs economist David Mericle pushed back his forecast for the Fed’s first cut to rates to September from July, in part due to Thursday’s reports on U.S. business activity and joblessness.

Treasury yields climbed this week on such concerns, but they were mostly stable Friday following the report on consumer sentiment. The yield on the 10-year Treasury slipped to 4.46% from 4.48% late Thursday. The two-year yield, which more closely tracks expectations for action by the Fed, was holding steady at 4.94%.

This week’s bumpiness for stocks came despite another blowout profit report from Nvidia, which has rocketed to become one of Wall Street’s most influential stocks amid a frenzy around artificial-intelligence technology. Fervor around AI had pushed some stocks to heights that critics called overdone, but Nvidia’s eye-popping growth and forecasts for more suggest it could keep going.

Nvidia rose another 2.6% Friday, making it the biggest single force pushing the S&P 500 upward.

Elsewhere on Wall Street, Workday fell 15.3% despite reporting stronger profit for the latest quarter than analysts expected. The company, which helps businesses manage their people and money, gave a forecast for upcoming subscription revenue that fell a bit short of Wall Street’s estimates.

In stock markets abroad, indexes fell across much of Asia and Europe. Indexes sank 1.4% in Hong Kong, 1.3% in Seoul and 1.2% in Tokyo.