Markets Rally on Better Inflation Data

May 20, 2024

Markets Rally on Better Inflation Data Photo

Following a string of disappointing inflation reports this year, investors breathed a sigh of relief last week after the April Consumer Price Index (CPI) came in modestly better than expectations.1 Softer economic data — including April retail sales showing no month-over-month growth — also fueled gains across the equity and bond markets.2 The S&P 500 Index notched its 23rd record high close of the year on Wednesday, while the Dow Jones Industrial Average closed above 40,000 for the first time.3

Bond yields finished the week lower,4 with cooler growth and inflation data increasing the likelihood of rate cuts to begin in the third quarter. Federal Reserve minutes out Wednesday should provide policymakers’ latest thoughts on the path forward for monetary policy.5

This week’s economic calendar is relatively light, highlighted by new data on the state of the housing market, including existing home sales on Wednesday and new home sales on Thursday.6 Nvidia moves back to center stage on the earnings front with numbers out Wednesday afternoon.7 Investors continue to place lofty expectations on the prospects for the biggest artificial intelligence (AI) winner.



1,2Yahoo! Finance – Retail sales flat in April, falling short of Wall Street's expectations; 5/15/24

3Barron’s – Dow, S&P 500, and Nasdaq Close With Record Highs; 5/15/24


5,6MarketWatch – U.S. Economic Calendar; as of 5/20/24

7Yahoo! Finance – Stocks, Nvidia earnings on Wednesday, retailers: 3 Things; 5/20/24

Tags: Inflation | Consumer Price Index (CPI) | Economic data | Federal Reserve minutes | Artificial Intelligence | housing market

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