Last week, the S&P 500 index rose 1.9%, marking its third consecutive week of gains, as earnings reports were mostly above expectations and investors grew more hopeful for rate cuts. The index is now up 3.7% for the month to date and up 9.5% for the year to date.
While quarterly earnings have been largely above expectations, revenue hasn’t surpassed estimates as often. Among the 64 S&P 500 components that reported last week, 79% topped earnings forecasts while just 44% had better-than-expected revenue, according to Bloomberg data. Still, only 40% of the components had revenue below expectations as 16% were in line with Street views.
Investors have been growing more hopeful that the Federal Reserve’s policy-setting committee will start cutting rates after last week’s weaker-than-expected monthly jobs data. In prepared remarks on Friday, Federal Reserve member Michelle Bowman said the Federal Open Market Committee should proceed cautiously with policy decisions, noting the impact of policy on financial stability.
All of the S&P 500’s sectors rose. Utilities had the largest percentage gain, up 4%, followed by a 3.1% increase in financials and a 2.6% rise in materials. Consumer staples, industrials, real estate and communication services also rose by more than 2% each. This week, investors will receive key updates on inflation with the April producer price index due on Tuesday, followed by the April consumer price index on Wednesday. Other reports will include April retail sales, building permits and housing starts.
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