Stock rally at last minute makes May a happy start

A late rally in large technology stocks erased a Wall Street slump and left major indexes moderately lower after a tough April, in which major benchmarks were dragged down by widespread tech sell-offs.

The S&P 500 rose 0.6%, accelerating in late-afternoon trading to close at 4,155. On the same day, the Dow Jones Industrial Average rose 0.3% and the tech-heavy Nasdaq gained 1.6%.

“‘Sell May and Go Away’is probably the most commonly cited stock-market cliche ever,” Ryan Detrick, Chief Market Strategist at LPL Financial said in a research paper. “The S&P 500 Index has closed higher during the month of May in eight of the past nine years — so ‘sell in June’ might be more appropriate.”

Retailers and household goods businesses suffered large losses at closing, but recovered in trading after hours. Procter & Gamble rose 0.2%. Amazon shares closed the day with a 4.4% gain, but continued to decline below 0% aftermarket trading. Amazon warehouse workers in New York City voted against forming a union on Monday, dealing a blow to organizers who last month pulled off the first successful U.S. organizing effort in the retail giant’s history. End-of-day trading also saw a rebound in

Technology stock prices. The sector has many companies with high stock prices and thus have more power to push the major indexes higher or lower. Apple was closed at 0.2%.

Many large communications firms gained ground. Meta, Facebook’s parent company, saw a 5.3% increase.

The positive start of May followed a disappointing April in which Big Tech companies had dragged the wider market lower, especially as interest rates were set to rise rapidly.

April is the worst month for Nasdaq

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U.S. crude oil prices were relatively unchanged after slipping earlier in the day. European energy ministers will meet in Brussels today to discuss sanctions and Russian supply concerns. Russia’s invasion of Ukraine prompted a jump in already high oil and natural gas prices.

Bond yields increased significantly. The yield on the 10-year Treasury was at 2. 98% after briefly rising to 3. 00% from 2. 89% late Friday. It hasn’t been above 3% since December 3, 2018, according to Tradeweb.

Treasury yields are on the rise as investors plan for higher rates. Markets are expecting an extra-large interest rate increase this week from the Federal Reserve as it tries to tame inflation, which is at its highest level in four decades. The central bank will likely raise its short-term rates by twice the normal amount in Wednesday’s statement. It has already raised its key overnight rate once, the first such increase since 2018, and Wall Street is expecting several big increases over the coming months.

Fear of Fed-driven turbulence

Fed rate hikes will raise costs for credit cards, car loans and mortgages. Investors have been fretting about rising inflation and its impact on businesses and consumers. Investors are concerned about rising inflation, its impact on businesses and consumers , but they also worry about the effect of rate increases in combating inflation. And whether an aggressive Fed will actually hinder economic growth.

Concerns over rising inflation are also looming over this latest round corporate earnings. Last week’s market decline was fueled by disappointing outlooks or results from Apple, Google parent Alphabet, and Amazon. The latest statements and results are being reviewed by investors to assess how much rising costs have affected operations, and whether price increases have hindered sales. The central question facing investors is how the Fed can keep inflation down and grow faster than trend, without creating a recession,” Mark Haefele (chief investment officer, UBS Global Wealth Management) stated in a note. “We expect growth in 2022 to be slower than last year, but not tip over into recession. We believe that the best strategy to avoid recession is to prepare for inflation. This is a simple and clear fact. “

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