Weekly review

The market ended the week on a positive note, with the S&P 500 reaching its highest level since August. Progress in debt ceiling negotiations eased concerns. Fed officials' comments created uncertainty about rate hikes. Economic data supported the possibility of more rate hikes. Expectations of a rate hike in June increased. NVIDIA and Marvell Technology had strong earnings, driving the outperformance of the semiconductor index. Mega caps continued to outperform. Treasury yields rose sharply, and the U.S. Dollar Index increased. Information technology, communication services, and consumer discretionary sectors performed well, while consumer staples and materials sectors were weaker. Markets are closed on Monday for Memorial Day.

Monday:

The stock market was mixed, with uncertainty about the debt ceiling lingering. Treasury Secretary Janet Yellen set an early June deadline, while House Speaker Kevin McCarthy expressed the possibility of a deal. Fed officials' comments on rate hikes had minimal impact. The major indices had modest gains or declines, struggling to break above 4,200. Mega caps and bank stocks provided some support.

Tuesday:

The stock market initially held steady but later declined due to reports of no imminent debt ceiling deal and concerns about a new wave of Covid in China. The energy sector was the only one in positive territory, supported by Chevron's upgrade. The consumer discretionary sector was a relative outperformer, driven by Lowe's earnings. Economic data showed a decline in manufacturing PMI but an increase in new home sales, affected by higher mortgage rates.

Wednesday:

Equities had a weak performance due to uncertainty surrounding the debt ceiling negotiations. House Speaker McCarthy stated that talks were far apart, but ongoing. Rate hike concerns and the release of FOMC meeting minutes had minimal impact. The major indices closed in negative territory, with a late afternoon rebound that didn't sustain. Market breadth favored decliners.

The consumer discretionary sector had the smallest decline, supported by Amazon.com and positive earnings from homebuilders. Urban Outfitters, Abercrombie & Fitch, and Kohl's also performed well. Analog Devices and semiconductor stocks were negatively affected by disappointing guidance, causing the PHLX Semiconductor Index to decline.

Thursday:

The major indices had a mixed showing. NVIDIA's strong fiscal Q1 results and guidance boosted semiconductor and mega cap stocks, supporting the market. Market breadth indicated weakness due to debt ceiling concerns. Reports suggested progress in debt ceiling negotiations, and U.S. economic data was relatively positive. Germany's weak GDP added to global growth concerns.

The second estimate for Q1 GDP was revised up, while the initial jobless claims report showed strength in the labor market. Initial claims increased slightly, but remained at levels indicating a tight labor market.

Friday:

The stock market ended the week positively as concerns about the debt ceiling eased and mega caps continued to rally. The S&P 500 reached its highest level since last August. Semiconductor stocks also saw significant gains after Marvell reported strong earnings and guidance. The market remained unfazed by rising expectations of a rate hike at the June FOMC meeting. Economic data showed growth in personal income and spending, with an increase in the PCE Price Index and core-PCE Price Index. Durable goods orders increased, and the trade deficit widened. Consumer sentiment improved slightly from the preliminary reading but decreased compared to April.