Wall Street Continues Record-Breaking Streak Amid Market Gains

Wall Street achieved further milestones on Friday as major stock indexes extended their record-winning streak and concluded the month with substantial gains. The S&P 500 rose 0.2%, marking its seventh consecutive gain and ninth straight winning week, setting a new record for the fourth consecutive day. The Dow Jones Industrial Average increased by 0.7%, while the Nasdaq composite climbed 0.2%. Both the Dow and Nasdaq reached new heights after reporting record highs earlier in the week.

Big technology stocks have been key drivers of the market’s record-breaking trajectory. Their high valuations significantly influence market movement. In May, technology stocks within the S&P 500 surged over 15%, whereas most other sectors in the benchmark index declined. Angelo Kourkafas, senior global strategist at Edward Jones, highlighted the tech-led rally supported by resilient earnings, questioning its sustainability in a research note.

On Friday, tech stocks continued to propel the market upward. Microsoft saw a 5.4% increase, and Broadcom rose by 4.7%. Meanwhile, Dell Technologies experienced an astonishing 32.8% surge, leading all stocks in the S&P 500. The company exceeded profit expectations and raised its outlook, attributing the increase to strong demand for AI computing.

Despite these gains, most sectors in the S&P 500 faced declines on Friday. Paramount Skydance fell 1.9%, Amazon.com dropped 1.2%, and Costco Wholesale decreased by 3.9%. Wall Street’s progress continues even amid concerns about worsening inflation due to the U.S. conflict with Iran. However, reports suggest the U.S. and Iran are working on a ceasefire deal, easing pressure on oil prices.

Brent crude’s August delivery price fell 1.7% to $91.12 per barrel, still higher than the $70 level before the war began. U.S. crude oil prices for July delivery also decreased by 1.7% to $87.36 per barrel. Despite stable Treasury yields as oil prices dipped, high oil prices remain a significant concern. The conflict has disrupted oil flow through the Strait of Hormuz, affecting global shipments and contributing to higher gasoline prices and inflation.

Several reports this week highlighted inflation’s impact on consumers. A preferred inflation measure by the Federal Reserve climbed to its highest level in three years. Amid rising inflation, consumer confidence is declining.

Wall Street’s inflation worries have been somewhat alleviated by recent corporate profit reports. Companies within the S&P 500 reported a 28% profit growth for the most recent quarter, according to FactSet. With most S&P 500 companies reporting, investor focus may shift back to inflation, consumer behavior, and the Fed’s interest rate path. The Fed is expected to maintain its benchmark interest rate steady through the year, as per CME’s FedWatch tool. While cutting interest rates could lower borrowing costs, it might also intensify inflation.

Despite Middle East turmoil, stocks achieved further gains in May, with the S&P 500 posting a 5.1% gain for the month. The index is up 10.7% year-to-date. On Friday, the S&P 500 added 16.43 points to reach 7,580.06. The Dow rose by 363.49 points to 51,032.46, and the Nasdaq increased by 55.15 points to finish at 26,972.62. Markets in Europe and Asia mostly followed the upward trend.