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U.S stocks jumped early Wednesday as Wall Street entered a fresh month of trading.
The S&P 500 climbed 0.7%, while the Dow Jones Industrial Average gained 2600 points, or 0.8%. The Nasdaq Composite jumped 1%.
An upbeat earnings report from Salesforce (CRM) gave sentiment a boost after the software company raised its profit forecast and said it did not see any significant impact on operations from macroeconomic uncertainty. The outlook comes in contrast with some downbeat quarterly results from corporate peers that signaled struggles with rising costs and supply chain imbalances ahead. Shares of Salesforce surged as much as 11% at the open.
“We’re just not seeing material impact on the broader economic world that all of you are in,” Salesforce Chief Executive Officer Marc Benioff said in an earnings call.
In a meeting with Federal Reserve Chair Jerome Powell on Tuesday, President Joe Biden discussed inflation — a “top economic priority” of his administration — while shifting responsibility to the central bank and emphasizing its independence. The meeting followed a Wall Street Journal op-ed by Biden underscoring his focus on taming soaring prices.
“At the end of the day, inflation is the biggest political challenge that is out there,” John Hancock Investment Management Co-Chief Investment Strategist Matthew Miskin told Yahoo Finance Live on Tuesday. “To bring down inflation, [the Fed has] got to bring down the economy.”
Wednesday’s moves follow an eventful May on Wall Street marked by worries of a recession, decades-high inflation levels and rising interest rates. Despite a month of sharp gyrations in equity markets, the S&P 500 churned out a small gain of less than 1% – even after seven consecutive weeks of losses briefly dragged the index into bear market territory. The Dow Jones Industrial Average also closed slightly up for May, while the Nasdaq Composite deepened losses for the month amid a continued rotation out of technology stocks.
In the past decade, the month of June has returned an average 1.4%, ranking it the fourth best month of the year, according to data from LPL Financial. Over the past 20 years, however, the month has been weak, with only September worse for stocks.
“June has something for everyone, as it is no doubt a very weak month historically, but the past decade it has been strong,” LPL Financial Chief Market Strategist Ryan Detrick said in a note. “Still, after the big bounce in late May, we wouldn’t be surprised at all if this recent strength continued into a potential summer rally.”
Bespoke Investment Group pointed out in a note Tuesday that summer months have historically seen weaker stock market returns relative to winter and early spring. According to data from the firm, the Dow Jones Industrial Average has averaged a gain of 0.47% in June over the last century, but has been a “coin flip” for positive returns during the month, logging gains only 52% of the time.
As investors set out for June, the Federal Reserve will begin shrinking its $8.9 trillion balance sheet, its second monetary tightening measure in efforts to quell inflation. The central bank is also expected to raise interest rates by another 50 basis points when officials meet for their next policy-setting meeting later this month.
For more on this article, please visit:
https://finance.yahoo.com/news/stock-market-news-live-updates-june-1-2022-112445431.html
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