Stocks Climb, Yields Hold, Commodities Mixed Amid Trade and Inflation Signals

Image Source : Krish Capital Pty Ltd

Index Update: On Thursday, the S&P 500 rose 0.41% and the Dow gained 0.65%, while the Nasdaq slipped 0.18%, weighed down by weakness in the tech sector. Most S&P 500 sectors finished higher, led by utilities, consumer staples, and real estate, as tech saw profit-taking. Wholesale prices unexpectedly fell 0.5% in April, defying expectations. In corporate news, UNH shares dropped 11% amid a federal criminal investigation, impacting the health care sector, while WMT declined 0.5% after warning of potential price hikes due to tariffs despite strong sales. GE shares rose 2.8% following Qatar’s announcement to use GE engines for Boeing’s largest wide-body aircraft order.

Market Movers: On Thursday, the top gainers were Innovative Solutions and Support, Inc. (+26.53%), followed by Carbon Revolution Public Limited Company (+25.66%). On the contrary New Fortress Energy Inc (-38.35%) and      Shoals Technologies Group, Inc (-21.93%) declined the most the same day.

Commodities Update: WTI and Brent crude oil futures hovered around $61 and $64 per barrel, respectively, aiming for weekly gains fueled by optimism over a 90-day trade truce between the U.S. and China that eased demand concerns. However, gains were limited by news of potential U.S.-Iran sanctions relief and progress in peace talks, which raised expectations of increased Iranian oil supply. Additional pressure came from a surprise rise in U.S. crude inventories and the IEA’s upward revision of global supply forecasts due to higher output from Saudi Arabia and other OPEC+ members easing production cuts. Gold prices slipped to about $3,200 per ounce, tracking a weekly loss of over 3% as easing trade tensions and reduced geopolitical risks lessened demand for the safe-haven metal. While benign U.S. inflation data supported expectations of Federal Reserve rate cuts this year, Fed Chair Jerome Powell warned of possible inflation volatility due to frequent supply shocks, which could challenge efforts to maintain price stability. Meanwhile, stalled progress in Russia-Ukraine talks added some uncertainty to the outlook.

Macro Update: The 10-year U.S. Treasury yield held steady around 4.42%, continuing its recent decline as weaker economic data boosted expectations of a more dovish Federal Reserve. April producer prices and consumer inflation came in lower than expected, while soft retail sales indicated weakening consumer demand. Although Treasury yields briefly rose following a U.S.-China tariff reduction, ongoing uncertainty about the long-term trade outlook and economic outlook has kept yields under pressure.

Futures Update: U.S. stock futures rose modestly following a mixed trading session, as investors remain cautious about potential new developments in the U.S.-China trade situation despite a recent agreement. The deal has led Barclays to withdraw its forecast of a U.S. recession later this year. Market focus is shifting to a consumer sentiment survey, which has declined in recent months due to tariff-related worries. Futures for the Dow, S&P 500, and Nasdaq 100 all showed slight gains, reflecting cautious optimism amid ongoing concerns about trade tensions and their impact on economic growth.

Thursday's stock market saw a relatively stable performance following Wednesday's choppy trading. Major indexes fluctuated throughout the day before closing mixed. The S&P 500 rose 24.35 points (0.40%) to close at 5,916.93. Technical analysis indicates the price is currently in a confluence area, previously acting as resistance, suggesting potential consolidation in the near term. However, the approaching golden cross of key moving averages points to an overall positive trend. Support is anticipated around 5,777, while resistance is projected near 5,977.