Despite the release of hot inflation data and comments from Fed Chair Jerome Powell, major indexes showed resilience in early trades on Tuesday. The Dow Jones Industrial Average edged up by 0.2%, while the S&P 500 and the Nasdaq saw gains of 0.1% each. Notably, GameStop (GME) and AMC Entertainment (AMC) continued their rally amidst a resurgence in meme-stock frenzy.
The Producer Price Index for April exceeded expectations by rising 0.5% from the previous month, with wholesale prices increasing by 2.2% annually. Core prices also saw a 0.5% uptick. The benchmark 10-year Treasury note yield fell to 4.45%.
During Powell’s speech at the Foreign Bankers’ Association in Amsterdam, he acknowledged the strength of the U.S. economy, citing strong consumer spending and business investment. Powell noted that inflation was making progress and described Tuesday’s Producer Price Index as “mixed” rather than “hot”.
Looking ahead, the Consumer Price Index for April is anticipated to see a slight decrease to 0.3%. Trading volume on the NYSE and Nasdaq was higher compared to the previous day, with advances outnumbering declines. The Russell 2000 and the Innovator IBD 50 ETF (FFTY) witnessed positive movement.
In terms of specific stocks, Home Depot (HD) reported higher-than-expected first-quarter earnings, while Nike (NKE) showed strength, albeit facing resistance at its 50-day moving average. Tech giants like Apple (AAPL), Microsoft (MSFT), Salesforce (CRM), and Cisco Systems (CSCO) had varied performances.
Chinese e-commerce giant Alibaba’s (BABA) shares were impacted by an earnings miss, while Tencent Holdings (TCEHY) saw a significant jump in profit. Meme stocks continued to surge, with GameStop and AMC Entertainment seeing substantial gains driven by retail investors.
Overall, the stock market displayed a mix of resilience and volatility in response to economic data and corporate earnings reports. It will be interesting to monitor how these factors continue to shape market dynamics in the days ahead.
