Key points:

  • All three major US indices rose for the week, with the Dow Jones posting the biggest gains.
  • 77% of S&P 500 companies that reported first-quarter earnings beat expectations.
  • Analysts forecast inflation to rise to 3.6% year on year.

Investors were monitoring comments from Federal Reserve officials and also awaiting the release of important inflation data next week.

The Dow Jones Industrial Average rose 0.32% to 39,512.84, adding 125.08 points. The S&P 500 added 0.16% to 5,222.68, up 8.6 points. The Nasdaq Composite, on the other hand, fell slightly by 0.03% to close at 16,340.87, down 5.40 points.

Is inflation rising or slowing?

Despite the mixed dynamics on Friday, all three indices ended the week with growth. The Dow Jones posted its biggest weekly gain since mid-December.

Comments from US Federal Reserve representatives influenced the expectations of investors, who are now focused on inflation data.

Atlanta Fed President Raphael Bostic noted signs of a slowing economy, but did not make predictions about the timing of interest rate cuts. Dallas Fed President Lori Logan took a tougher stance, saying it was unclear whether monetary policy had been tight enough to curb inflation and return it to its 2% target.

Key information on progress in this direction will be available this week when the US Department of Labor releases the consumer price indices (CPI) and producer price indices (PPI).

Analysts forecast the core CPI rate at an annualized rate of 3.6%, the highest level in three years.

In addition, preliminary data from the University of Michigan Consumer Sentiment Index for May showed a sharp decline in this indicator compared to August 2021. At the same time, inflation expectations have increased both in the short and long term.

The reporting season is coming to an end

Among the 11 major sectors of the S&P 500 index, consumer staples stocks (.SPLRCS) posted the biggest gains. Meanwhile, consumer discretionary stocks (.SPLRCD) underperformed.

First quarter earnings season is drawing to a close. According to LSEG, 77% of the 459 companies included in the S&P 500 index that have already reported their results exceeded analysts’ expectations.

Nvidia shares rose 1.3% after TSMC, the Taiwanese semiconductor maker that is the world’s largest and Nvidia’s main supplier, reported sales rose nearly 60% in April.

Novavax shares jumped 98.7% after reaching a vaccine licensing deal with Sanofi worth up to $1.2 billion.

Trading volume on US exchanges was 9.47 billion shares, below the average of 10.87 billion shares over the last 20 trading days.