Bulls Return; Fed, European Central Bank Face Divergent Paths
Published Jun 7, 2024
This was not the May to follow the conventional wisdom of “Sell in May and go away.” The ongoing news about the power of generative artificial intelligence (AI) to disrupt so many aspects of the work and leisure worlds fueled continuing optimism among traders and investors who had been sitting on the sidelines, hoping for a pullback.
The Dow closed out the month with a monstrous, late-day rally, rising almost 575 points, or 1.5 percent, for its best day of 2024. This move reversed the drop on May 23 of 600 points, or more than 1.5 percent, on the Dow’s worst day since March 2023. This decline in 2024 was primarily due to a 7.6 percent drop in Boeing (BA) shares following an announcement of delayed plane deliveries.
Despite the eleventh-hour gains on Friday, fueled by the release of key inflation data that reassuringly met expectations, all three indexes lost ground over the week. The Nasdaq fell 1.1 percent on the week, snapping a five-week streak of gains. The Dow and S&P 500 lost 1 percent and 0.5 percent, respectively. Yet the month remained a good one for all the indexes, with gains of 2.3 percent for the Dow, representing almost all its gains for the year, 4.8 percent for the S&P, and 6.9 percent for the Nasdaq. Year to date as of month end, the Dow was up 2.64 percent, the S&P 10.64 percent, and the Nasdaq 11.48 percent. On May 17, the Dow closed above 40,000 for the first time ever; but it ended the month at 38,686.
Stocks slid from record levels as interest rate worries dominated investor sentiment after blockbuster earnings […]