The major markets closed last week mixed with one of the largest diversions in performance this year between domestic indices. The Nasdaq managed to add another 1.4% while the Dow Jones fell two and a third percent with the S&P 500 effectively ending flat.

Both the Nasdaq and the S&P 500 saw fresh all-time highs for the week.

While the earnings season is largely wrapping up, NVDI managed to surprise market analysts with their earnings results which stimulated the Semiconductor subsector of the Tech sector.

At the sector level, Information Technology blew away all the other segments in performance. Only Communication Services also managed to close positive, while the remaining 9 ended negative.

The Economic Calendar also reflected mixed results, and those that were released last week came out at the tail end of the week. Existing Home Sales fell short of expectations. Inventory reached the highest level since October of 2021 with 1,210,000 homes on the market according to the preliminary reading.

One of the factors mentioned was how mortgage rates continue to be elevated compared to recent history. According to Freddie Mac, the average 30-year fixed rate is 7.02%, compared to 6.39% from a year ago.

Generally speaking, interest rates just continue to remain elevated. While the yield curve remained relatively flat from last week, much of the curve remains 50 to 70 basis points higher than at the beginning of the year. Furthermore, the FOMC Minutes for the April and May Meeting were released last week. In the document, it was highlighted that:

“Various participants mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate.”

This continues to show that the path for lower interest rates remains a challenge for the Fed to navigate.

https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-first-quarter-fiscal-2025

https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20240501.pdf

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Concerned about inflation? Check out our Tips to Reduce Risks In Case of Recession.

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The S&P 500® Index is a capitalization index of 500 stock-designed to measure performance of the broad domestic economy through changes in the aggregate market value of stock representing all major industries. https://us.spindices.com/indices/equity/sp-500 The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities. https://us.spindices.com/indices/equity/dow-jones-industrial-average The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. Today the NASDAQ Composite includes over 2,500 companies, more than most other stock market indexes. Because it is so broad-based, the Composite is one of the most widely followed and quoted major market indexes. https://indexes.nasdaqomx.com/Index/Overview/COMP The MSCI World Index, which is part of The Modern Index Strategy, is a broad global equity benchmark that represents large and mid-cap equity performance across 23 developed markets countries. It covers approximately 85% of the free float-adjusted market capitalization in each country and MSCI World benchmark does not offer exposure to emerging markets. The MSCI Emerging Markets (EM) Index is designed to represent the performance of large- and mid-cap securities in 24 Emerging Markets countries of the Americas, Europe, the Middle East, Africa and Asia. As of December 2017, it had more than 830 constituents and covered approximately 85% of the free float-adjusted market capitalization in each country. https://www.msci.com/ The S&P GSCI Crude Oil index provides investors with a reliable and publicly available benchmark for investment performance in the crude oil market. https://us.spindices.com/indices Companies in the S&P 500 Sector Indices are classified based on the Global Industry Classification Standard (GICS®). https://us.spindices.com/indices