The New York stock market closed higher as a rebound buying spree followed the previous day's decline. The Nasdaq hit an all-time high.
On the 24th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 39,069.59, up 4.33 points (0.01%). The Standard & Poor's (S&P) 500 index rose 36.88 points (0.70%) to 5,304.72, and the Nasdaq Composite Index closed at 16,920.79, up 184.76 points (1.10%). The Nasdaq index reached a record high.
On this day, major IT companies including Nvidia attracted buying interest in the New York stock market. Nvidia rose 2.57%, continuing its strong performance from the previous day. The seven major tech stocks known as the 'Magnificent 7 (M7)' mostly rose. Apple increased by 1.66%, Meta Platforms by 2.7%, Microsoft (MS) by 0.74%, and Alphabet A by 0.83%. Meanwhile, Amazon fell 0.17%.
Besides the M7, relatively smaller Intel rose 2.1%, and Advanced Micro Devices also joined the tech-led rally with a 3.7% increase.
The durable goods orders for April in the U.S., announced on this day, showed the robustness of the U.S. market. According to the U.S. Department of Commerce, April durable goods orders, adjusted for seasonal factors, increased by 0.7% from the previous month to $284.1 billion. Durable goods orders have recorded month-over-month increases for three consecutive months since February this year.
On the other hand, consumer sentiment sharply declined, and indicators showed that expected inflation rose further. According to the University of Michigan, the final consumer sentiment index for May, reflecting consumers' confidence in the U.S. economy, was 69.1. This is a steep drop of 10.5% from the previous month's 77.2.
Meanwhile, the finalized one-year expected inflation rate rose by 0.1 percentage points to 3.3% compared to the previous month. At the same time, the short-term expected inflation range of 2.3?3.0% formed over the past two years was breached.
Goldman Sachs announced that it is delaying the Federal Reserve's (Fed) first interest rate cut to September. The previously expected timing for the first cut was July. David Mericle, an economist at Goldman, noted that Fed officials recently suggested in speeches that a meaningful slowdown in economic activity or the labor market, as well as inflation, would be necessary to cut rates in July, but the current trend does not support this, making a July cut unlikely.
Although the stock market showed strength, confidence in the timing of the Fed's rate cut has diminished. According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the federal funds futures market reflects a 50.2% probability that the Fed will keep the benchmark interest rate unchanged in September, slightly up from the previous day.
Meanwhile, the New York stock market will be closed on the 27th in observance of Memorial Day.
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