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Market Update 05/6/24


Markets gained between April 30 and May 6 as investors digested information about the Federal Reserve’s likelihood of cutting interest rates.

Markets closed lower on Tuesday ahead of the Federal Open Market Committee’s April meeting on May 1. The Dow Jones Industrial Average lost 1.5%, the S&P 500 lost 1.6% and the Nasdaq composite lost 2.1%. The Energy Select Sector, the Consumer Discretionary Select Sector and the Technology Select Sector fell 3.0%, 2.4% and 2.2%, respectively.

The Chicago Board Options Exchange Volatility Index can be used as a gauge of investor sentiment regarding the state of equity markets. The CBOE Volatility Index rose 6.7% to $15.65.

The Bureau of Labor Statistics reported that the Employment Cost Index increased 1.2% in the first quarter of 2024. The ECI tracks the change in hourly labor cost to employers over a period of time.

The three major indexes closed mixed on Wednesday after the Fed kept the benchmark rate unchanged at a range of 5.25-5.5%. The Dow added 0.2%, the S&P 500 lost 0.3% and the Nasdaq lost 0.3%. The Energy Select Sector and the Technology Select Sector decreased 1.6% and 1.0%, respectively. The Utilities Select Sector increased 1.2%.

The CBOE Volatility Index plunged 17.0% to a value of $15.39.

The Fed detailed a lack of further progress in the regression of inflation as the rationale behind keeping the funds rate steady. 

By Thursday’s close, the three major indexes ended higher following the Fed’s decision to keep rates unchanged. The Dow rose 0.9%, the S&P 500 rose 0.9% and the Nasdaq rose 1.5%. The Real Estate Select Sector, the Technology Select Sector and the Consumer Discretionary Select Sector increased 1.4%, 1.4% and 1.3%, respectively.

The CBOE Volatility Index fell 4.6% to $14.68.

The BLS announced that jobless claims remained unchanged at a value of 208,000 for the week ended April 27.

Stocks closed higher on Friday due to a rally in technology stocks. The Dow climbed 1.2%, the S&P 500 climbed 1.3% and the technology-heavy Nasdaq climbed 2.0%. The Technology Select Sector, the Communication Services Select Sector and the Materials Select Sector increased 2.8%, 1.1% and 1.0%, respectively. 

The CBOE Volatility Index dropped 8.1% to $13.49.

Markets ended higher on Monday due to positive sentiment regarding the future of interest rate cuts. The Dow gained 0.5%, the S&P 500 gained 1.0% and the Nasdaq gained 1.2%. The Communication Services Select Sector, the Financials Select Sector and the Technology Select Sector rose 1.4%, 1.3% and 1.2%, respectively.

Moving forward, investors should remain vigilant of comments from voting members of the FOMC. Comments from these Fed officials can be essential in attempting to predict the future of interest rate cuts and the effect on equity markets.

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