US stock market ends second week of May with massive losses
It was another bearish week for US equities, with major indexes suffering weekly declines, the effects of the Federal Reserve’s decision to raise the interest rate from 0.50% to 1%, the highest since the year 2000, still weighing on the markets.
The New York Stock Exchange (NYSE) All Share Index (ASI) lost 2.53% for the week, marking its 7th consecutive week of decline. It opened trading at 15,566.6 basis points and it closed the week trading at 15,257.4 basis points. Although the week started down for the NYSE for the first three days, Friday’s market bulls managed to lessen the damage, but weren’t enough to stop the bleeding.
The NASDAQ posted its 6th week of declines, losing 2.80% in the week under review. It started at a basis point of 11,923.03 and ended the week at 11,805.00 basis points. The week in question saw an increase in trading volume from the previous week of 37% as the market recorded a volume of 1.23 billion.
The Dow Jones and S&P 500 also posted declines, of 2.14% and 2.41% respectively. The Dow Jones is in its 7th week of declines while the S&P 500 is in its 6th week of market declines.
What moves the market?
The stock market ended the second week of May with massive losses. All three major indexes started the week with declines, then gained sharply higher on Friday after Chairman Jerome Powell argued that a 75 basis point rate hike was still off the table. The Dow Jones Industrial Average ended with its seventh consecutive weekly loss, marking its longest losing streak since 2001, while the S&P 500 slid 2.4% for its longest weekly losing streak since 2011, and the Nasdaq Composite fell 2.8%.
Over the past six trading days, the US Department of Labor released four economic reports – wage growth, CPI, PPI and import prices – which together suggested that inflation peaked in March, good news for market participants concerned that the Fed could trigger a recession with a wave of interest rate hikes to fight inflation.
The first quarter US reporting season has reached its final stretch, with 458 S&P 500 companies reporting. Of these, 78% provided results above the consensus, according to Refinitiv. For the first three months of the year, analysts now expect overall S&P 500 annual earnings growth of 11.1%, down from 6.4% at the end of the quarter, according to Refinitiv.
On Friday, Elon Musk announced that his planned acquisition of Twitter was “temporarily suspended” over concerns over fake accounts, which sent the stock down 9.7%. Also on Friday, shares of Robinhood soared 25% after Sam Bankman-Fried, the founder of cryptocurrency exchange FTX, disclosed a 7.6% stake in the company.
In Monday’s intraday session, Saudi Aramco (ARMCO) officially overtook Apple as the world’s most valuable company on Wednesday. The public energy giant closed the session with a market cap of $2.43T, while the iPhone maker ended the day at $2.37T. In fact, it’s a trend that has accelerated this year, with the energy sector supported by a surge in oil prices following a surge in inflation that dampened demand for high-flying tech stocks. . This shows that Aramco shares are up 30% year-to-date, while Apple shares have slipped 20% year-to-date.
Shares of Disney (DIS) initially rose after the bell on Wednesday, but then extended a selloff seen in the previous session by falling 2.6% to $102.40 in AH trading. The new 52-week low saw investors focus on the company’s revenue and earnings failures, as well as widening losses in its direct-to-consumer segment. Operating losses for Disney’s streaming business, which also includes ESPN+ and Hulu, tripled to $877 million from a year ago, due to higher programming and production spending .
The White House on Thursday announced steps to ease the current baby formula shortage, which has worsened in recent weeks due to a major product recall and supply chain issues. In fact, in the first week of May, 43% of infant formula supplies were out of stock nationwide, up from 31% two weeks earlier, according to retail price data website Datasembly. Many stores also have quotas in place on how much formula a person can buy at a time, while pediatricians recommend not diluting formula (which could be harmful to the kidneys) or switching to other brands.
List of the top 5 winners
Although US markets performed poorly, there are still a few notable winners for the week. They include:
- Hemisphere A Media (HMTV) 72.94%
- Biohaven Pharmaceutical Holding Ltd (BHVN) 56.23%
- Veru Inc. (VERU) 53.66%
- Blue Water Vaccines Inc (BWV) 50.53%
- Compass Therapeutics Inc (CMPX) 50.30%
Top 5 losers include;
- Therapeutic md Inc (TXMD) -59.95%
- Redbox Entertainment Inc (RDBX) -56.35%
- Upstart Holdings Inc (UPST) -54.55%
- Kaleyra Inc (KLR) -52.66%
- Sql Technologies Corp (SKYX) -46.49%