Table of Contents
- Introduction
- Stock Market Highlights from Last Week
- What to Watch in the Stock Market Next Week
- Conclusion
Introduction
Happy Memorial Day!
The stock market has been becoming increasingly volatile with the VIX jumping up since last weekends newsletter; making it essential for investors to stay updated. This week, we'll explore what to watch in the stock market next week and what happened last week. From Nvidia's record-breaking highs to movements in the Dow Jones Industrial Average, here's a detailed look at the key events and trends driving the markets.
Stock Market Highlights from Last Week
Major Indices Performance
Here's a quick overview of how major indices performed over the week:
- The S&P 500 closed nearly flat on the week, closing at 5,304.72.
- The Nasdaq Composite advanced 1.31%, ending at 16,920.80.
- The Dow Jones Industrial Average dropped 2.30%, finishing at 39,069.59.
Week to date, the S&P 500 closed nearly flat with a 0.01% loss on the week. The tech-heavy Nasdaq stood out with a gain of 1.31%, while the Dow experienced a decline of 2.30%, marking its first negative week in five weeks.
Nvidia's Impressive Rally
Nvidia shares climbed about 2.6% on Friday, continuing an upward trajectory thanks to a stellar earnings report. This enthusiasm catapulted Nvidia shares above $1,000 for the first time, and by the week's end, the stock had noted nearly a 15% gain.
Sector Performances
Several sectors experienced notable movements:
- Communication Services led the S&P 500's sector gains on Friday.
- News Corporation gained 3.32%, while Live Nation rebounded by 2.69% despite concerns from a recent lawsuit.
- Other tech stocks like Advanced Micro Devices and Intel also saw uptrends of 3.7% and 2.13%, respectively.
Economic Data and Fed Policy
After a series of robust economic and labor data, Goldman revised its prediction for the Federal Reserve's first rate cut to September from July. Consequently, Traders are now pricing in less than a 50% chance that the Fed will slash rates in September.
Oil Prices and Their Impact
Crude oil futures saw a rebound from their three-month lows on Friday:
- U.S. crude oil hit an intraday low below $76.20.
- Global benchmark Brent fell to around $81.
Both saw positive turns later in the session but ended the week with losses.
What to Watch in the Stock Market Next Week
Tech Sector Trends
With the bullish momentum in tech stocks, especially in giants like Nvidia, AMD, and Intel, investors should keep an eye on any updates and reports from these companies. Nvidia's ongoing success with AI technologies and reverse split could continue to push the market, fueling the typical election-year gains.
Federal Reserve Rate Cuts
Next week, a number of crucial reports will be key in a chance of rates being cut sooner rather than later. Monitoring the Fed's announcements and any related economic indicators will help you gauge market sentiment and future movements.
Economic Reports Scheduled
Several key economic reports are expected next week:
- Consumer Confidence
- Jobless Claims
- International Consumer Price Index (CPI) reports
- GDP
- Chicago PMI
Market-Wide Indicators
The broadening of market participation has been noted, with more individual stocks and sectors performing well. Keeping an eye on market breadth trends can offer insight into the overall health and resilience of the economy.
Trade Easier Analyst Insights
Current Trends and Key Support Areas
Amazon's stock (AMZN) is presently trading near the crucial $180 level, which appears to be a significant support area. This level might act as a strong foundation for the stock, providing a potential launching pad for upward movements.
Potential Upside Targets
Should the broader market conditions remain favorable, we could see Amazon's stock bounce back to the $185 level, with a further potential climb to $190. Investors are closely monitoring these levels as possible targets for short-term gains.
Downside Risks and Lower Support Levels
However, if the market experiences a downturn, Amazon's stock might dip to around the $175 level before finding new support. There is a small gap to be aware of below $175 as well. This area could serve as a secondary level, potentially leading to another rebound.
Conclusion
Last week, we saw a mix of highs and lows. As we move into this shortened week, staying updated on what to watch in the stock market next week and what happened last week will offer valuable context and opportunities. Whether you're tracking tech trends, awaiting Federal Reserve decisions, or analyzing new economic reports, staying informed is key to navigating the market landscape.
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