The Market Settled This Week In Mixed Fashion.
The S&P 500 and Nasdaq Composite, which reached a fresh all‐time high, closed with gains while the Russell 2000 and Dow Jones Industrial Average logged solid losses this week.
The first half of the week featured muted price action due to a wait‐and‐see mindset in front of NVIDIA's (NVDA) earnings after Wednesday's close. NVIDIA (NVDA) shares surged in response to impressive earnings and outlook, which also bolstered semiconductor stocks and AI‐related names. This did not translate into support for the broader market due to a sense that stocks are due for some consolidation.
The PHLX Semiconductor Index (SOX) jumped 4.8% this week, the Vanguard Mega Cap Growth ETF (MGK) logged a 1.6% gain, and the Russell 3000 Growth Index climbed 0.9%.
This price action benefitted the S&P 500 information technology sector, which logged a 3.4% gain on the week. The only other sector that closed higher was communication services (+0.3%). Meanwhile, the energy (‐3.8%) and real estate (‐3.7%) sectors logged the biggest declines.
Market participants were reacting to mixed earnings news from a slate of retailers. Target (TGT), Lowe's (LOW), TJX (TJX), AutoZone (AZO), Macy's (M), and others reported quarterly results this week.
There was also a batch of economic data, which also garnered mixed responses. The S&P Global U.S. Manufacturing PMI increased to 50.9 from 50.0 while the S&P Global U.S. Services PMI jumped to 54.8 from 51.3, the New Home Sales Report for April was weaker than expected, April Durable Orders were stronger than expected, and the final reading of the University of Michigan's Consumer Sentiment survey, which showed that year‐ahead inflation expectations slowed to 3.3% from 3.5% in the preliminary reading.
The 10‐yr note yield settled four basis points higher this week and the 2‐yr note yield settled 13 basis points higher at 4.95%.
As a reminder, markets were closed on Monday for Memorial Day.
S&P 500: +0.03% for the week / +11.2% YTD
Nasdaq Composite: +1.4% for the week / +12.7% YTD
S&P Midcap 400: ‐1.3% for the week / +7.0% YTD
Dow Jones Industrial Average: ‐2.3% for the week / +3.7% YTD
Russell 2000: ‐1.2% for the week / +2.1% YTD