Market reaches new record high as interest rates decline

The market rallied this week and interest rates declined in response to this week’s economic data, which went the market’s way in terms of implications for Fed policy. The major indices all logged fresh record highs on an intraday and on a closing basis. This price action had the Dow Jones Industrial Average trading above 40,000 for the first time and the S&P 500 broached 5,300.  Meme stocks exhibited a resurgence following the first X post by “Roaring Kitty” in three years. Shares of GameStop (GME) and AMC Entertainment (AMC) were beneficiaries from speculative buying interest, jumping 27.2% and 51.2%, respectively, this week although they ended the week far below the highs. 

The economic reports last week included the April Consumer Price Index (CPI), showing disinflation on a year-over-year basis in total CPI (to 3.4% from 3.5%) and core CPI (to 3.6% from 3.8%). This followed three consecutive hotter-than-expected CPI readings, along with some other recent reports that indicated sticky prices, which contributed to growing worries about the Fed staying restrictive for longer than anticipated.  Fed Chair Powell called the data “quite mixed” in a moderated discussion at the Foreign Bankers’ Association’s annual meeting.

Shares of Alphabet (GOOG) making a sharp turn higher during the week. This was in response to Alphabet introducing new AI features at its developers conference. 

Shares of Walmart (WMT) climbed higher following impressive earnings results and outlook. Meanwhile, fellow Dow components Cisco (CSCO) and Home Depot (HD) received a negative response to its earnings news.