Early trading: Nasdaq and S&P 500 hit new intraday highs

View the latest market conditions On the evening of the 15th, Beijing time, U.S. stocks continued to rise in early trading on Wednesday. The Nasdaq Composite Index and the S&P 500 Index hit record intraday highs.
The U.S. CPI report for April showed that inflation has cooled, leading to market expectations that the Federal Reserve will accelerate interest rate cuts in 2024.
U.S. retail sales slowed significantly in April, indicating that high interest rates have severely weakened consumers\’ spending power.
The Dow rose 130.66 points, or 0.33%, to 39688.77 points; the Nasdaq rose 60.03 points, or 0.36%, to 16571.21 points; the S&P 500 rose 20.43 points, or 0.39%, to 5267.11 points.
On Wednesday morning, the S&P 500 Index rose to a maximum of 5,279.26 points and the Nasdaq Composite Index rose to a maximum of 16,628.18 points. Both hit intraday record highs.
After the U.S. CPI data for April was released, the market expected that the Federal Reserve would accelerate the pace of interest rate cuts this year.
U.S. Treasury bond yields fell sharply. The 10-year Treasury bond yield fell by more than 10 basis points. It fell as low as 4.34%, the lowest level since April 10.
The 2-year and 5-year Treasury yields both fell by about 8 basis points.
8:30 a.m. Eastern Time. The U.S. Bureau of Labor Statistics released the consumer price index (CPI) data for April that attracted much market attention.
The report shows that after adjusting for seasonal factors, the U.S. CPI rose by 3.4% year-on-year in April, in line with expectations. The CPI in March rose by 3.50% year-on-year.
The CPI in April increased by 0.3% month-on-month compared with March. It is expected to be 0.40%.
CPI increased by 0.40% month-on-month in March.
This is the first time in six months that U.S. CPI growth has fallen.
Excluding food and energy, the U.S. core CPI in April rose 3.6% year-on-year and 0.3% month-on-month. Both were in line with expectations.
Economists believe that the core inflation rate better reflects the underlying inflation level than the overall CPI.
The Bureau of Labor Statistics reported that housing and gas spending accounted for more than 70% of the increase.
Another data showed that U.S. retail sales in April were unchanged from March data. This means that the month-on-month increase in this data was 0%. It was lower than market expectations of a 0.4% increase.
After the CPI data was released, traders increased their bets on interest rate cuts by the Federal Reserve in September and December.
The swap market has raised its expectations for the pace of interest rate cuts by the Federal Reserve this year.
Fed swap prices point to faster pace of rate cuts in 2024.
The current interest rate swap contract shows that traders believe that the probability of a 25 basis point interest rate cut by the September Federal Reserve meeting is more than 80%.
The latest data from the CME Group\’s FedWatch Tool shows that market traders currently expect the probability of the Federal Reserve to cut interest rates in September this year to be about 68%.
While the CPI data may lead the Fed to conclude that inflation is resuming its downward trend, officials want to see more data to gain the confidence they need to start considering a rate cut.
Federal Reserve Chairman Powell said yesterday that he would keep interest rates high for a longer period of time to wait for more signs of cooling inflation. The Fed will need to remain patient and let restrictive policies take effect. Some policymakers do not expect to cut interest rates at all this year. .
Jason Pride, director of investment strategy and research at boutique wealth management firm Glenmede, said: What these inflation data do for the Fed is that it lays the first foundation for them to cut interest rates later this year.
Jason Pride said: If the market is worried that the Federal Reserve will not cut interest rates at all, tonight\’s CPI report only alleviates some concerns.
It doesn\’t put the Fed on track to start cutting interest rates immediately, as they need a few more reports like this to gain some confidence.
Art Hogan, chief market strategist at Riley Wealth, said that the April CPI report is basically in line with expectations under the worst case scenario. And under the best case scenario, there is no upward surprise. And in some aspects it is better than expected.
Art Hogan believes that the hot CPI data last month was one of the reasons for the market decline. This report is very much in line with expectations.
He said this is not a hot number. The market will celebrate this at some point today.
He said that the United States has not made significant progress in fighting inflation this year. But this is a step in the right direction to make the Federal Reserve more reassured.
If they receive enough data before the September meeting, that\’s probably when they decide to cut rates.
Analyst Chris Anstey commented that the month-on-month increase in core CPI in April was in line with expectations. The overall increase was slightly lower than expected.
This preliminary inflation data will give the Fed some relief, allowing them to still claim that U.S. inflation is on the way back.
Analyst Joseph Richter said that the subconscious rebound in the U.S. stock market may be more due to the significant slowdown in U.S. retail sales in April rather than lower-than-expected CPI data in April.
For several months, sales data has tended to lead commodity CPI.
Regarding the weak April retail sales report, some analysts pointed out that the report shows that high interest rates are beginning to seriously weaken consumers\’ spending power.
Before Wednesday\’s CPI data was released, another inflation report on Tuesday pointed out that U.S. inflation was more sticky – the producer price index (PPI) rose 0.5% month-on-month in April. It was higher than expected. It once triggered people\’s concern that the Federal Reserve may delay cutting interest rates. worries.
Tom Lee, director of research at Fundstrat Global Advisors, said there are signs that inflation is easing in other areas, including home and auto insurance. That could be a good sign for markets and Fed policy.
Tom Lee said: This will indicate to the market that U.S. inflation is now normalizing and the economy is in good shape.
Monetary policy is so restrictive that the Fed actually needs to cut interest rates.
That\’s pretty good for stocks.
If the Fed continues to stay on hold, that would be good for stocks; if it cuts interest rates, I think that would be better.
Focus Stocks NVIDIA will announce quarterly results on May 22.
KeyBanc Capital Markets analysts set a price target on Nvidia\’s stock price at $1,200.
Prior to this, Goldman Sachs recently gave a 12-month target price of US$1,100 (from US$875 before March). Because the institution increased its EPS (earnings per share) forecast for the fiscal years from 2025 to 2027. The average increase was 8%. Indicating continued strong AI server demand and supply improvement.
A report pointed out that the total compensation of Nvidia CEO Jensen Huang surged by 60% in the last fiscal year.
According to the latest filing released Tuesday afternoon, Huang\’s total compensation for fiscal year 2024 is $34.2 million.
That\’s up from the $21.4 million he\’d receive in fiscal 2023 and the $23.7 million in fiscal 2022.
While his base salary has remained relatively stable at just under $1 million, his total compensation has risen significantly.
Tesla’s energy storage super factory project in Shanghai recently received a construction permit.
This is the company’s first energy storage gigafactory project outside the United States.
According to previous relevant media reports, the above-mentioned energy storage super factory project will start construction in May this year and complete mass production in the first quarter of 2025.
According to the 13F position report submitted by Bridgewater Fund to the SEC, the institution added new positions in chip manufacturers AMD and Amazon in the first quarter.
Among them, 679,500 shares of AMD were bought. The market value of the position at the end of the period was US$123 million; 1.0479 million shares of Amazon were bought. The market value of the position at the end of the period was US$189 million.
Matt Garman, Amazon\’s newly appointed head of cloud computing, will take over a business with annual revenue of $100 billion and profitability at an all-time high.
He also faces a daunting task: keeping the cloud computing pioneer ahead of the curve in the age of artificial intelligence.
Garman is 48 years old. He has long served as the engineering team leader of Amazon Cloud Services (AWS). He later became the sales director.
He will succeed Adam Selipsky next month in one of the most important positions in the technology industry.
American technology media reporter Andrew Lanxon published an article on Wednesday saying that the just-concluded Google I/O conference contained so much information and was so professional that ordinary consumers were completely confused.
The reporter believes that the Google I/O conference is not just an event for developers. Google also needs to cater to ordinary consumers and let them know what the newly released products are and what they can do.
Meta Platforms said on Tuesday it would discontinue Workplace, its workplace-focused app, as the company shifts its focus to building artificial intelligence and Metaverse technology.
Workplace will be deactivated for customers starting in June 2026, but Meta will continue to use it as its internal message board, the company said, adding that users will continue to have access to the product until August 2025.
U.S. MEME stocks such as GameStop and AMC Cinemas generally fell.
The U.S. Department of Justice may consider filing a lawsuit against Boeing for violating the settlement agreement.
Vodafone launches €500 million share buyback plan.
New York Community Bank will sell approximately $5 billion in warehouse loans to JPMorgan Chase.
Electric vehicle startup Canoo\’s first-quarter net loss widened and missed expectations.
Petrobras CEO fired by Brazilian President Lula.