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Stock Market News for May 20, 2024

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U.S. stocks ended mostly higher on Friday, with the Dow ending above the 40,000 level for the first time in history as expectations of rate cuts by the Federal Reserve rose again. The S&P 500 ended in positive territory but the Nasdaq closed marginally lower.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 0.3% or 134.21 points to end at 40,003.59, setting a new record high.

The S&P 500 gained 0.1% or 6.17 points, to finish at 5,303.27 points. Materials and financial stocks were the best performers on the index.

The Materials Select Sector SPDR (XLB) gained 0.9%, while the Financials Select Sector SPDR (XLF) added 0.6%. Eight of the 11 sectors of the benchmark index ended in positive territory.

The tech-heavy Nasdaq slid 0.1% or 12.35 points to close at 16,685.97 points.

The fear-gauge CBOE Volatility Index (VIX) was down 3.46% to 11.99. Advancers outnumbered decliners on the NYSE by a 1.18-to-1 ratio. On Nasdaq, a 1.09-to-1 ratio favored declining issues. A total of 15.6 billion shares were traded on Friday, higher than the last 20-session average of 11.7 billion.

Dow Hits New High, Markets Rally on Positive Economic Data

Wall Street has been on a rally following the release of some positive economic data over the past week. The upbeat sentiment persisted on Friday, extending the rally further.

The Dow ended the day above the 40,000 mark for the first time in history, to record yet another successful week. The blue-chip index had reached an intraday high of 40,051.05 points on Thursday, before closing 0.1% lower.

The Dow’s rally was led by Walmart Inc. ((WMT - Free Report) ) and Caterpillar Inc. ((CAT - Free Report) ), which rose 1% and 1.6%, respectively. Caterpillar has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

This week’s rally gathered pace after fresh economic data showed that inflation eased in April for the first time after rising in the first three months of the year. Colling inflation has raised hopes that the Federal Reserve will finally start rate cuts.

Markets are pricing in a 68% possibility that the Federal Reserve will go for the first rate cut in September, according to the CME FedWatch Tool.

No major economic data was released on Friday.

Weekly Roundup

All three indexes ended the week in positive territory. The Dow ended the week up 1.2%, while the S&P 500 and Nasdaq finished 1.5% and 2.1% higher for the week.

The Dow recorded its fifth straight week of gains, while the Nasdaq and S&P 500 notched fourth consecutive week of gains. It was also the longest winning streak for all three indexes since the stretch ending Feb 9.


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