Yahoo Finance Hamza Shaban
Stock market today: Stocks cap another winning month, S&P 500 logs best May since 2003
US stocks wrapped the last trading day of the month on a high note, notching the sixth positive month in the last seven for all three major indexes.
The blue-chip Dow Jones Industrial Average (^DJI) rose 1.5%, or about 575 points, shaking off two days of sharp losses. The S&P 500 (^GSPC) rose 0.8%, while the tech-heavy Nasdaq Composite (^IXIC) overcame earlier losses and finished just below the flatline.
The major indexes all broke records for the month. The S&P and Nasdaq posted their best May performances since 2003. And the Dow saw its best May since 2020.
While investors won out on the month, the trading day showed signs of investors taking a breather. Shareholders in Nvidia (NVDA), the AI darling, took an exhale after the company's stock price rose above $1,100. Shares fell around 0.8% Friday as investors took profits on the chip producer as well as other tech giants.
ADVERTISEMENT
Investors also reacted to an update to the Personal Consumption Expenditures price index, which was seen as pivotal for stocks. The "core" PCE index, which is closely watched by the Fed and strips out the cost of food and energy, rose 0.2% in April, slowing from the 0.3% increase seen in March. Still, the index showed that price increases remained sticky last month.
Bond yields fell after the inflation report, with the benchmark 10-year Treasury (^TNX) falling to around 4.5%.
Read more: How does the labor market affect inflation?
In individual movers, shares of Trump Media & Technology Group (DJT) fell after former President Donald Trump was convicted on 34 criminal counts related to falsifying business records.
On the corporate front, Dell (DELL) reported a rise in revenue, but its shares plunged 17% as its AI server sales fell short of high hopes. On the flip side, Gap stock (GPS) surged 28% on the heels of a sizable earnings beat.
LIVE COVERAGE IS OVER11 updates
Stocks close May with a bang
All three major indexes won out in May, posting the sixth positive month in the last seven.
The blue-chip Dow Jones Industrial Average (^DJI) rose 1.5%. The S&P 500 (^GSPC) rose 0.8%, while the tech-heavy Nasdaq Composite (^IXIC) shook off earlier losses and closed just below the flatline.
The major indexes all broke records for the month. The S&P achieved its best May since 2020. The Dow saw its best May since 2021. And, finally, the Nasdaq logged its best May since 2023.
- Hamza Shaban
A look at the week ahead
Corporate earnings are winding down for the season but several key players are scheduled to report next week. Dollar Tree (DLTR) Lululemon (LULU), and CrowdStrike (CRWD) are among the notable companies scheduled to post earnings the coming days.
A slowing earnings calendar puts the spotlight on economic data releases and other market moving events outside of boardrooms. A fresh Job Openings and Labor Turnover Survey (JOLTS) on Tuesday followed by ADP employment figures on Wednesday will provide insight into the labor market. Factory orders as well as US productivity numbers will offer investors another measure to gauge the strength of the US economy.
How the US political environment will influence markets will continue to unfold next week, following Donald Trump’s conviction on falsifying business records. Geopolitical events could also shift. On Friday, President Biden said Israel had proposed a Gaza ceasefire and called on Hamas to agree to the new offer, saying it was the best way to end the conflict.
Yahoo Finance's Brent Sanchez has a graphical breakdown of what to watch next week:
- Hamza Shaban
Google defends AI Overview after viral search mishaps
If you've toyed around with Google's new AI Overviews, or encountered social media posts about the feature's strange and incorrect answers, you might be wondering what Google is up to. After unveiling the feature, which offers conversational answers to user queries, saving them from clicking through search results, Google found itself on the wrong end of another AI blunder.
Some examples of the erroneous and absurd answers included instructing people include glue in their pizza recipes or to eat rocks.
In a company blog post published Thursday, titled "About last week" Google’s Head of Search, Liz Reid, attempts to explain why things went wrong. She said that Google tested the feature extensively before it was unleashed to the world. "But there’s nothing quite like having millions of people using the feature with many novel searches. We’ve also seen nonsensical new searches, seemingly aimed at producing erroneous results," she said.
Rather than "hallucinate" or make things up, as other AI chatbots might, Reid said AI Overview's issues come from other reasons: "misinterpreting queries, misinterpreting a nuance of language on the web, or not having a lot of great information available." Those challenges are also present in producing traditional search results too, she said.
Google is cutting back on the use of social media and forum posts to answer AI Overviews. And, Reid said, the company aims to now use AI Overviews for hard news topics, |where freshness and factuality are important."
- Hamza Shaban
Fed's stance of higher for longer likely not shaken by new inflation reading
The Federal Reserve's stance on holding interest rates higher for longer likely won't deviate after the latest reading form its favored inflation gauge, which showed continued price stickiness.
The "core" Personal Consumption Expenditures index, which excludes volatile food and energy prices the Fed can’t control, clocked in at 2.8% over the prior year in April. That year-over-year figure is unchanged compared to the same reading in March, reports Yahoo Finance's Jennifer Schonberger.
But the month-over-month increase in April showed a sliver of progress, clocking in at 0.2%. That was a tenth of a percent lower than the level for March and represented the slowest such increase for the index so far in 2024.
Still, even though the monthly reading registered an improvement, many experts don't see the change as enough to steer the Fed away from holding rates steady.
The data also comes just a few weeks after Fed officials met earlier this month. Since that huddle numerous central bank officials have expressed caution of prematurely lowering rates.
- Hamza Shaban
Stocks trending in afternoon trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page during afternoon trading on Friday.
Trump Media & Technology Group (DJT): The parent company of former President Donald Trump's social media platform, Truth Social, shed 7% Friday afternoon after Trump was found guilty on all 34 counts of falsifying business records intended to influence the 2016 presidential campaign.
Caesars (CZR): Shares of the hotel and casino company rose more than 11% Friday following a Bloomberg report that revealed investor Carl Icahn has taken a large stake in the business. Last month, the casino operator missed expectations for its first quarter results.
Zscaler (ZS): The loud security company rose by 5% Friday afternoon, riding the momentum of fiscal third quarter results that beat on revenue and earnings. Forecast for the fourth quarter on both the top and bottom lines came in above estimates, as businesses increase their spending on cybersecurity.
Gap (GPS): Shares of the retailer shot up more than 20% after reporting strong first quarter earnings and sales growth in all four of its brands.
- Hamza Shaban
Stocks slide in afternoon trading
Stocks slid further into the red Friday afternoon as investors pulled back from many of the Big Tech names that have propelled indexes higher in May.
The blue-chip Dow Jones Industrial Average (^DJI) rose 0.2%. The S&P 500 (^GSPC) shed 0.7%, heading for a weekly loss, while the tech-heavy Nasdaq Composite (^IXIC) fell by 1.6%
- Hamza Shaban
Bill Ackman considers IPO of Pershing Square
The hedge fund manager Bill Ackman, better known to some as a prolific poster on X, is considering taking his investment firm public as soon as next year, the Wall Street Journal reported Friday, leveraging his rising social media fame.
Ackman is selling a stake in the firm Pershing Square to investors as a first step in a potential IPO, according to the report, in a funding round expected to value the firm at about $10.5 billion. Pershing Square managed over $16 in net assets as of the end of April.
Ackman started Pershing Square in 2004 and gained notoriety as an activist hedge fund man. A veteran of proxy battles, Ackman's public persona has since become entangled with various social and political causes, including offering support to Donald Trump after the former president was convicted on Thursday of falsifying business records.
Ackman's political stands also include disparaging diversity, equity, and inclusion efforts and advocating to oust Harvard University president Claudine Gay, who stepped down in January.
- Hamza Shaban
September rate cut predictions inch up after PCE reading
Market bets are inching closer towards a September rate cut, following a "core" April PCE reading that showed price pressures backing off from the prior month.
The measure, which is closely watched by the Fed and strips out the cost of food and energy, served as the latest signal that central bankers will be more comfortable easing interest rates in the months ahead.
Some market observers see a rate cute arriving as soon as July.
"There is a disinflationary trend that is well in place," Kristina Hooper, chief global market strategist at Invesco, told Yahoo Finance on Friday, after the PCE print. "It is very, very possible we get a July cut, if not July, September."
Hooper and other experts have noted that the inflation reading contrasts with metrics from the first quarter, which might have spooked Fed officials into delaying potential cuts. But Friday's reading bolsters the case for ending the tightening cycle.
The probability of a September rate cut, according to the CME FedWatch Tool, stands at nearly 55%, up from 51% a day ago, highlighting the optimistic impact of the latest inflation reading.
- Hamza Shaban
Stocks trending in morning trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page during morning trading on Friday.
Trump Media & Technology Group (DJT): The parent company of former President Donald Trump's social media platform, Truth Social, shed 5% Friday morning after Trump was found guilty on all 34 counts of falsifying business records intended to influence the 2016 presidential campaign.
MongoDB: (MDB) Shares of the software company plummeted 25% after it issued light guidance for the quarter and reduced its forecast for the full fiscal year.
Dell (DELL): The technology company stumbled Friday morning, losing 19% after posting an all-around earnings beat in its first quarter. However, investors latched onto an outlook that came in lower than expected and forecasts that spending on AI infrastructure would drag down margins for the year.
Gap (GPS): Shares of the retailer shot up more than 20% after reporting strong first quarter earnings and sales growth in all four of its brands.
- Hamza Shaban
Stocks climb as investors take heart in lower inflation reading
Investors appeared to exhale Friday morning after a key inflation measure slowed, keeping hopes alive that the Federal Reserve may still cut rates later this year.
The blue-chip Dow Jones Industrial Average (^DJI) rose 0.1%, coming off two days of sharp losses. The S&P 500 (^GSPC) gained about 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) increased about 0.2%.
- Alexandra Canal
DJT bounces back from post-Trump conviction losses
Shares of Trump Media & Technology Group (DJT), the parent company of former President Donald Trump's social media platform Truth Social, bounced back from extended hour trading losses to rise about 6% early Friday after Trump was found guilty on all 34 counts of falsifying business records intended to influence the 2016 presidential campaign.
Trump, who will likely appeal the verdict, will be sentenced on July 11 and faces up to four years in prison on each count.
Trump Media, the parent company of Truth Social, went public on the Nasdaq after merging with special purpose acquisition company Digital World Acquisition Corp.
Shares have fallen about 10% since the company's public debut at the end of March.
Trump founded Truth Social after he was kicked off major social media apps like Facebook and Twitter, the platform now known as X, following the Jan. 6 Capitol riots in 2021. Trump has since been reinstated on those platforms, although the former president almost exclusively posted on his Truth Social account throughout the trial.
In April, an updated regulatory filing showed Trump Media reported sales of just over $4 million as net losses reached nearly $60 million for the full year ending Dec. 31. The company warned it expects losses to continue amid greater profitability challenges.
In May, the company reported first quarter results that revealed losses of $327 million, mostly tied to expenses related to its SPAC deal. The company disclosed as of April 29 over 621,000 different shareholders owned stock in Trump Media, noting the "vast majority" of these were retail investors.
Trump maintains a roughly 60% stake in Truth Social. At Thursday's closing price of around $52 a share, Trump Media boasts a market cap of roughly $7 billion, giving the former president a stake worth around $4.2 billion. Right after the company's public debut, Trump's stake was worth just over $4.5 billion.
In late April, the stock hit a milestone that secured Trump an additional $1.2 billion. Stakeholders, however, are still subject to a six-month lockup period before selling or transferring shares.
