[New York Stock Market] Mixed Trends Amid Rising Expected Inflation and Hawkish Remarks

Dow Jones Index rises 0.3%, up for 8 consecutive trading days
"Too early to consider rate cuts," hawkish remarks also made

The New York stock market showed mixed trends as expected inflation rose and hawkish remarks from officials emerged.

On the 10th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 39,512.84, up 125.08 points (0.32%) from the previous session. It rose for eight consecutive trading days and the closing price marked the highest since April 1. It recorded the largest weekly gain since December last year, rising more than 2%.

The Standard & Poor's (S&P) 500 index rose 8.60 points (0.16%) to 5,222.68, while the Nasdaq index fell 5.40 points (0.03%) to 16,340.87. The S&P 500 maintained its upward trend for the second consecutive trading day, but the Nasdaq declined after a slight rise the previous day. Both the S&P 500 and Nasdaq indices rose more than 1% for the week, continuing their upward trend for three consecutive weeks.

The market started higher, not ruling out the possibility of interest rate cuts this year, but turned mixed in the afternoon.

The University of Michigan released its May consumer sentiment index and expected inflation figures that worsened that morning. The one-year short-term expected inflation rose to 3.5% from 3.2% the previous month. The long-term five-year expected inflation increased from 3.0% to 3.1%. According to the University of Michigan, the preliminary consumer sentiment index for May was 67.4, down from 77.2 the previous month, marking the lowest level in six months. Despite the rise in expected inflation and the retreat in consumer sentiment, investor sentiment in the stock market showed somewhat uneasy patterns.

In the afternoon, market sentiment shifted toward the possibility that interest rate hikes could not be ruled out. Lori Logan, president of the Dallas Federal Reserve Bank, said at an event in New Orleans, Louisiana, "It is too early to think about rate cuts." Michelle Bowman, a Federal Reserve Board member, mentioned the Federal Open Market Committee (FOMC) dot plot in an interview, saying, "I have not included any cuts at this point (this year)."

Neel Kashkari, president of the Minneapolis Federal Reserve Bank, and Austan Goolsbee, president of the Chicago Federal Reserve Bank, said in a joint interview with CNBC regarding the possibility of rate hikes, "Nothing is off the table," and "We need to wait and see."

Market participants are awaiting the release of April's Consumer Price Index (CPI) and Producer Price Index (PPI) next week.

By individual stocks, pharmaceutical company Novavax surged more than 100% intraday but the gain slightly narrowed to the 98% range. Novavax announced that it signed a new exclusive joint license agreement with Sanofi for the joint commercialization and development of a COVID-19 vaccine. Under this agreement, Novavax is expected to receive a total of $1.2 billion in cash and equity investments.

Salad chain Sweetgreen surged more than 30% on strong first-quarter earnings. Alphabet A fell 0.8%. The previous day, OpenAI announced it is developing a search product to compete with Google's conversational search engine Perplexity, which affected the stock price. Sundar Pichai, CEO of Google, said the day before, "We are behind ChatGPT, but there is still plenty of time to catch up."

Tesla also fell 2%. News of workforce reductions at its China subsidiary and reports that CEO Elon Musk may have to appear again before the U.S. Securities and Exchange Commission (SEC) regarding the acquisition of X (formerly Twitter) influenced the stock.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) traded at 12.55, down 0.14 points (1.10%) from the previous session.