Stock Market News Today, 5/22/24 – Indices Fall as the Fed’s Inflation Concerns Grow
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Stock Market News Today, 5/22/24 – Indices Fall as the Fed’s Inflation Concerns Grow

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The Federal Reserve’s meeting minutes showed that officials were concerned about inflation

Last Updated: 4:05 PM EST

Stock indices finished today’s trading session in the red. The Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) fell 0.05%, 0.27%, and 0.51%, respectively. This came after the Federal Reserve’s meeting minutes showed that officials were growing concerned about inflation, which suggests they lack the confidence to reduce interest rates soon.

The minutes from the April 30 to May 1 meeting revealed that stubborn inflation at the start of 2024 made them hesitant to ease monetary policy. Some officials even mentioned the possibility of tightening policy further if inflation risks increase.

The committee unanimously decided to keep the benchmark short-term borrowing rate at 5.25% to 5.5% and noted that maintaining this rate was supported by solid economic growth. While there have been slight improvements in inflation, consumer sentiment surveys show increasing worries.

Officials also highlighted the financial pressures on low- and moderate-income households, which have increasingly turned to credit cards and buy-now-pay-later services to make purchases.

Despite optimism about growth, there is uncertainty about how long it will take to reach the 2% inflation goal and the impact of high rates.

Last Updated: 11:20 AM EST

Stock indices mixed so far in today’s trading. On Wednesday, the National Association of Realtors released its U.S. Existing Home Sales report, which measures the change in sales of existing residential buildings during the previous month on an annualized basis. Existing home sales came in at 4.14 million for the month of April, below the expected 4.21 million.

As a result, existing home sales decreased month-over-month by 1.9% after a 4.3% drop in March. Indeed, existing home sales have increased only five times in the past 24 months, as higher interest rates continue to make homeownership difficult. On a year-over-year basis, sales fell 3.3%.

First Published: 5:05 AM EST

U.S. futures remained flat on Wednesday morning as investors looked ahead to Nvidia’s (NVDA) first-quarter earnings report due today. Futures on the Nasdaq 100 (NDX) were down 0.04% at 4:24 a.m. EST, May 22, while the S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) were up by about 0.05% and 0.06%, respectively.

Yesterday’s trading session marked strong performances from both the S&P 500 and Nasdaq Composite, as they climbed 0.25% and 0.22%, respectively. Also, both indices closed at new record highs. Further, the Dow Jones Index gained 0.17%.

In major stock market news, EV giant Tesla (TSLA) gained 6.6% on a positive update about its fully electric semi-truck, the Tesla Semi. Also, Macy’s (M) stock rose 5% after the retailer surpassed Q1 earnings estimates. Furthermore, in the extended trading session, Urban Outfitters (URBN) gained 6.5% following the release of better-than-expected Q1 results.

Moving to the key economic data, investors await the minutes from the Federal Open Market Committee’s (FOMC) April-end meeting, scheduled for release today. Market participants are eager to hear the central bank’s perspective on the overall health of the economy.

Apart from Nvidia’s quarterly report, traders also expect the results from Target (TGT), Analog Devices (ADI), TJX (TJX), Snowflake (SNOW), and Synopsys (SNPS).

At the time of writing, the U.S. 10-year Treasury yield was up, floating near 4.44%. At the same time, WTI crude oil futures trended lower, hovering near $77.58 per barrel as of the last check.

Elsewhere, European markets opened lower on Wednesday morning as investor enthusiasm faded. Investors continue to evaluate the monetary and economic outlook and are awaiting NVDA’s results today.

Asia-Pacific Markets End Mixed on Wednesday

Asia-Pacific indices ended today’s trading session on a mixed note following reports that Beijing could raise tariffs by about 25% on imported cars with large engines. Chinese stocks moved higher after the country’s central bank disclosed measures to support the real estate sector.

Hong Kong’s Hang Seng index declined 0.12%. Also, Japan’s Nikkei and Topix indices finished lower by 0.85% and 0.81%, respectively. However, China’s Shanghai Composite and Shenzhen Component indices ended higher by 0.02% and 0.12%, respectively.

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