Stock Market News for May 16, 2024

Zacks Equity Research

16 May 2024 at 9:04 am·4-min read

Market News

U.S. stocks closed higher on Wednesday as investors digested economic data, which showed Federal Reserve Chair Jerome Powell’s cautious stance, underscoring the need for additional data before considering policy changes. Alongside, market participants evaluated earning results. All three major indexes ended in positive territory.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 0.9% or 349.89 points to close at 39,908.00. Notably, 22 components of the 30-stock index ended in positive territory, while eight finished in the red zone and one remained unchanged.

The tech-heavy Nasdaq gained 231.21 points or 1.4% to close at 16,742.39.

The S&P 500 advanced 1.2% or 61.47 points to end at 5,308.15. All 11 broad sectors of the benchmark ended in positive territory. The Technology Select Sector SPDR (XLK), the Real Estate Select Sector SPDR (XLRE), the Utilities Select Sector SPDR (XLU) and the Health Care Select Sector SPDR (XLV) rose 2.3%, 1.7%, 1.5% and 1.5%, respectively.

The fear-gauge CBOE Volatility Index (VIX) was down 7.2% to 12.45. A total of 14.78 billion shares were traded on Wednesday, higher than the last 20-session average of 11.11 billion. The S&P 500 posted 71 new 52-week highs and no new 52-week low. The Nasdaq Composite registered 285 new 52-week highs and 76 new 52-week lows.

CPI Comes Lower Than Expected

The Labor Department’s Bureau of Labor Statistics reported a 0.3% increase in the Consumer Price Index (CPI) in April, slightly below the consensus estimate of 0.4%. Excluding food and energy, core inflation came in at 0.3% for the month of April, meeting forecasts. Year over year, CPI rose 3.4% in April, and core CPI rose 3.6%, both in line with estimates. The year-year-year core CPI growth rate was the lowest since April 2021.

As a result, projections for the Federal Reserve’s interest rate cuts are adjusted to a lower range by the end of the year, between 4.75% and 5% compared to the current range of 5.25% to 5.5%. Despite this adjustment, the likelihood of the Fed implementing rate cuts earlier, especially in July, remains low.

The U.S. Census Bureau announced that retail sales for April remained unchanged compared to the 0.6% growth in the previous month, hinting at consumer caution amid rising prices. The reports present a dilemma for the Federal Reserve, which has maintained its benchmark interest rate since July 2023 amid persistent inflationary pressures.

Federal Reserve Chair Jerome Powell maintained a cautious stance, underscoring the need for additional data before making policy changes. While the CPI figures indicate progress, policymakers are expected to closely watch inflation trends in the coming months.

Earnings Releases

Riskified Ltd. RSKD reported first-quarter adjusted earnings of $0.04 per share, surpassing the Zacks Consensus Estimate of $0.02 per share. This software company generated total revenues of $76.41 million, outpacing the Zacks Consensus Estimate by 1.33%.

Nextracker Inc. NXT reported fiscal fourth-quarter adjusted earnings of $0.96 per share, beating the Zacks Consensus Estimate of $0.59 per share. This solar energy equipment company generated total revenues of $736.5 million, outpacing the Zacks Consensus Estimate of $681 million.

Dole plc DOLE reported first-quarter adjusted earnings of $0.43 per share, beating the Zacks Consensus Estimate of $0.31 per share. This farm products company generated total revenues of $2.12 billion, surpassing the Zacks Consensus Estimate by 3.01%.

Shares of Riskified, Nextracker and Dole returned 15.3%, 6.9% and 3.8%, respectively. Riskified and Dole carry a Zacks Rank #3 (Hold) each. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Economic Data

The New York Federal Reserve released data from its Empire State manufacturing survey, revealing that the business conditions index fell to 15.6 for the current month. The reading missed economists’ expectations of a negative reading of 10 within the state.

The U.S. Census Bureau also reported that business inventories for March were revised down to a decrease of 0.1%, while the Febuary figure was revised down to a 0.3% increase against the previously reported 0.4%.

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Market News

How Did the Benchmarks Perform?

CPI Comes Lower Than Expected

Earnings Releases

Economic Data

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