Shared by Sam Lawhon, Larson Director of Investments

Market Recap

The S&P 500 index rose 0.5% this week, starting May on a positive note, as investors grew more hopeful the Federal Reserve’s policy-setting committee will start cutting rates after April’s US jobs data came in weaker than expected.

The S&P 500 ended Friday’s session at 5,127.79 in its second weekly gain in a row. The market benchmark is now up 7.5% for the year to date.

The index earlier this week ended April with a 4.2% loss, the first monthly drop since October 2023. The decline came amid increasing fears that it may be a while before the Federal Open Market Committee feels comfortable lowering rates. The FOMC on Wednesday held benchmark interest rates steady for the sixth straight time, citing a lack of further progress on inflation in recent months.

Still, investors were optimistic on Friday after government data showed the US economy added fewer jobs than expected last month while wage growth eased. Total nonfarm payrolls climbed by 175,000 in April versus the Bloomberg consensus estimate of a gain of 240,000. The unemployment rate came in at 3.9%, up from 3.8% the month prior, which was the market’s expectation for April. Average hourly earnings growth slowed to 0.2% from 0.3% in March; expectations had been for wage growth to stay at 0.3% in April.

Quarterly earnings reports continued to come in largely above expectations although revenue hasn’t been coming in above estimates as much as earnings. Among the 185 S&P 500 components that released quarterly reports this week, almost 77% had better-than-expected earnings and 58% had better-than-expected revenue, according to Bloomberg data.

By sector, utilities led this week’s climb with a 3.4% rise, followed by a 1.6% increase in consumer discretionary and advances of 1.5% each in real estate and technology.

The utilities sector’s gainers included shares of AES (AES), which ended the week 8.4% higher amid the company’s report of higher-than-expected Q1 adjusted earnings per share. AES reaffirmed its 2024 adjusted EPS guidance.

In consumer discretionary, shares of Garmin (GRMN) jumped 16% amid the navigation device maker’s report of higher-than-expected fiscal Q1 results.

The consumer discretionary sector also got a boost from Amazon.com (AMZN), whose shares climbed 3.7%, amid stronger-than-expected Q1 results from the e-commerce company.

However, four sectors fell this week, led by energy, which lost 3.4%, and financials, which shed 0.6%.

The energy sector’s drop came as crude oil futures fell. Decliners included shares of APA Corp. (APA), which fell 9.9% as the company reported Q1 adjusted earnings per share below analysts’ mean estimate despite revenue coming in slightly above the Street view.

Next week’s earnings calendar features Vertex Pharmaceuticals (VRTX), Walt Disney (DIS), Duke Energy (DUK), Uber Technologies (UBER) and Airbnb (ABNB).

Economic data will include April consumer credit and a preliminary reading on May consumer sentiment.

Provided by MT Newswires

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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