This week's update covers significant movements in global markets, focusing on the United States, Europe, Japan, China, and other key markets. Highlights include the U.S. stock market's mixed performance, Europe's inflation concerns, Japan's economic data, China's housing sector aid, and central bank actions in Hungary and Turkey.
United States
Nasdaq Hits New Records While Dow Suffers Worst Week Since Early April
- The Dow Jones Industrial Average recorded its biggest weekly loss (-2.33%) since early April.
- The Nasdaq Composite continued its march into record territory.
- The S&P 500 Index was roughly flat, while small-cap stocks lost ground.
- An equal-weighted version of the S&P 500 Index underperformed its market-weighted counterpart by 127 basis points (1.27 percentage points).
NVIDIA Beats Estimates
- NVIDIA, the third-largest company in the S&P 500 by market capitalization, reported first-quarter earnings that beat consensus estimates.
- NVIDIA shares rose 9.3% on Thursday, adding roughly USD 220 billion to its market capitalization.
- The gains in NVIDIA did not translate into broader market gains, as nearly 90% of the stocks in the S&P 500 closed lower on Thursday.
Manufacturers See Rising Costs
- S&P Global reported that its composite index of business activity jumped unexpectedly to 54.4 in May, its highest level in over two years.
- Inflation data in the report concerned investors, particularly the rise in manufacturing costs.
Market Indexes Changes
| Index | Friday's Close | Week's Change | % Change YTD |
|---|---|---|---|
| DJIA | 39,069.59 | -934.00 | 3.66% |
| S&P 500 | 5,304.72 | 1.45 | 11.21% |
| Nasdaq Composite | 16,920.80 | 234.83 | 12.72% |
| S&P MidCap 400 | 2,976.67 | -39.58 | 7.02% |
| Russell 2000 | 2,069.67 | -26.05 | 2.10% |
Europe
Mixed Performance Amid Inflation Concerns
- The pan-European STOXX Europe 600 Index ended 0.45% lower.
- Italy’s FTSE MIB lost 2.57%, France’s CAC 40 Index declined 0.89%, Germany’s DAX was little changed, and the UK’s FTSE 100 Index slid 1.22%.
UK Inflation Slows Less Than Expected
- Annual growth in UK consumer prices slowed to 2.3% in April from 3.2% in March.
- Markets scaled back expectations for midyear rate cuts by the Bank of England.
Eurozone PMI and Wage Growth
- The eurozone composite PMI for May came in at a 12-month high of 52.3.
- Negotiated wages in the first quarter rose 4.7% year over year.
ECB’s Lagarde Hints at June Rate Cut
- ECB President Christine Lagarde indicated a “strong likelihood” of a rate cut in June.
Japan
Equities Finish Lower
- The Nikkei 225 Index fell 0.36%, and the broader TOPIX Index experienced a marginal decline.
- Japanese bond yields continued to rise, with 10-year government bond yields reaching 1.0% for the first time in 11 years.
Economic Data Highlights
- Japanese manufacturing PMI climbed to 50.5 in May.
- The services PMI eased to 53.6 but remained in expansionary territory.
Yen Remains Weak
- The yen traded around 24-year lows, closing the week at approximately JPY 157 levels.
China
Stocks Retreat Amid U.S. Rate Concerns
- The Shanghai Composite Index declined 2.07%, and the blue chip CSI 300 lost 2.08%.
- The Hong Kong Hang Seng Index fell 4.83%.
New Aid for Troubled Housing Sector
- The People’s Bank of China announced a historic rescue package for the property sector.
- Measures included a RMB 300 billion re-lending program and lowering the minimum down payment ratio for home purchases.
Monetary Policy Remains Steady
- Chinese banks left their one- and five-year loan prime rates unchanged at 3.45% and 3.95%, respectively.
Other Key Markets
Hungary
- The National Bank of Hungary reduced its main policy rate from 7.75% to 7.25%.
- Policymakers noted a pickup in economic growth and expect further acceleration in the second half of the year.
TĂĽrkiye (Turkey)
