Published: Monday, May 20, 2020
NEW YORK – The majority of U.S. stocks indexes ticked higher on Monday, adding to the latest week’s gains.
S&P 500 rose 0.4% during morning trading, and is on course to break its previous record. As of 10 am Eastern time, the Nasdaq composite index was up 0.7% and on track to set a new record. After closing above 40,000 for the first time, the Dow Jones Industrial Average trailed the market, down 4 points or less than 0.1%.
Norwegian Cruise Line, which is leading the market, soared 6.1% after exceeding analysts’ expectations with its financial forecasts. The company said that demand for cruises is increasing, and its competitors have gained as a result. Royal Caribbean Group and Carnival Group both gained 4.6%.
The three major U.S. indexes all set new records last week, largely due to renewed hopes that the Federal Reserve can cut interest rates in this year’s budget as inflation is expected to cool. Stock prices were also lifted by reports that showed big U.S. corporations earning more than expected.
The upcoming week will have few high-quality economic reports. For example, the headline report from last week showed that inflation was finally heading in the right directions after a disappointing start to the new year. There are some reports that could have a significant impact on the market, such as those on corporate profits.
Atop them all is Nvidia, whose rocket ride amid a frenzy around artificial-intelligence technology has been a major reason for the S&P 500’s gains over the last year. Expectations are high for its quarterly report on Wednesday. Analysts predict that its revenue will have more than tripled from last year to almost $24.59 billion.
The stock’s gain this year is now 91%.
The schedule also includes Lowe’s, Target, and Ross Stores. These events could provide more information on the state of spending in US households. The pressure has increased on them due to the high inflation rate, even though it is not as bad as previously. Cracks are most noticeable among low-income customers.
Target’s stock dropped by 1.3% on Monday after the company announced it would lower prices for thousands of essentials like diapers and milk, as a way to give customers relief from rising prices.
After erasing the gains made in the early morning following the death by helicopter of Iran’s President, crude oil prices on the market were mixed. The benchmark U.S. oil barrel was up by 0.2% to $79.76. Brent crude, which is the international standard, fell 0.2% to $83.83 a barrel.
On the bond market, the yields were mostly stable. The 10-year Treasury yield rose from 4.42% to 4.43% late Friday. The yield on the two-year Treasury, which is more closely linked to expectations of Fed action, remained at 4.83%.
On Wednesday, the Fed will release its minutes of its most recent meeting where its main interest rate was again set at its highest level in over two decades. The Fed hopes to manage the delicate balance of grinding the economy down through high interest rates just enough to bring inflation under control, but not too much so that it causes an painful recession.
CME Group data shows that traders have a 89% chance of the Fed reducing its main interest rate this year.
Indexes on stock exchanges abroad were modestly higher in Asia and Europe.
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Matt Ott and Zimo Zhong, AP writers, contributed.
Source: ABC News