On Friday, key US stock market indices closed mixed. The maximum results were shown by securities of telecommunication, oil and gas, and healthcare sectors. At the same time, the main outsiders were the shares of industrial and consumer goods and services sectors.
In addition, stock indices demonstrated high volatility and constant fluctuations throughout the trading session yesterday. Experts said that the main reason for such market behavior was the investors’ attempts to avoid risk against the background of constantly growing uncertainty.
Thus, in the afternoon, indices were steadily increasing by 0.5-1% on the news that in May the Central Bank of China decided to reduce the five-year LPR rate to 4.45% from April’s 4.6%. Market participants perceived such softening of the monetary policy by the Chinese regulator as a tangible support for the economy, which suffered from the COVID-19 pandemic and the strict restrictive measures.
However, later stock exchange indicators began to fall robustly due to traders’ concerns about high inflation impact on the financial performance of businesses and consumers. In addition, on Friday, market participants discussed the US Federal Reserve’s plans to aggressively increase the benchmark interest rate. Investors are concerned that such decisive measures of the US regulator can not only reduce the impact of inflation on the global economy, but also significantly limit its growth in the future.
Yesterday, US Fed Chairman Jerome Powell said that the central bank plans to act more aggressively in order to return the inflation rate in the US to the 2% target. The US Federal Reserve’s decision, Powell said, would not be affected even by the prospect of a decline in the economy in the short term.
Notably, at the end of the meeting in early May, the Fed raised its key rate by 50 basis points, now its range is 0.75-1% yearly. Earlier in March, the US regulator raised the rate by 25 basis points. The last time the central bank raised the rate at two meetings in a row was back in 2006. At the same time, it was the first 50 basis points hike last seen in 2000.
Top gainers and losers
As a result, the Dow Jones Industrial Average gained 0.03% on Friday, the NASDAQ Composite high-tech index shed by 0.30% and the S&P 500 broad market index added 0.01%.
Yesterday, the key leaders among the Dow Jones Industrial Average index components in trading the day before were securities of Cisco Systems Inc adding 2.92%, Salesforce.com Inc increasing by 2.60%, and McDonald’s Corporation gaining 2.14%.
Shares of Boeing Co lost 5.07%, Caterpillar Inc declined by 4.32%, and 3M Company dropped by 2.13% showing the weakest results among the index components.
Securities of VF Corporation added 6.07%, American Tower Corp increased by 4.73%, and Eli Lilly and Company gained 4.39%. The companies topped the list of gainers among the components of the S&P 500 index.
The main outsiders here were Ross Stores Inc losing 22.47%, Deere & Company dropping by 14.07%, and Advance Auto Parts Inc declining by 7.23%.
The leaders among the components of the NASDAQ Composite in yesterday’s trading were the securities of GeoVax Labs Inc adding 90.18%, SIGA Technologies Inc soaring by 43.35%, and Redbox Entertainment Inc jumping by 40.00%.
Shares of Athersys Inc. plummeted by 65.54%, Evofem Biosciences Inc declined by 3.17%, and Lixiang Education Holding Co Ltd tumbled by 51.81%. These stocks were among the top losers among the NASDAQ components.
Yesterday, the securities of the American discount department store chain Ross Stores Inc. plummeted to a 52-week low, losing 22.47% and closing at 71.87 points.Deere & Company, a machinery company that makes agricultural, construction and logging equipment, fell to a 52-week low, dropping by 14.07% and closing at 313.31 points .
The capitalization of automotive parts supplier Advance Auto Parts Inc sank to a 52-week low, declining by 7.23% to 181.89 points.
The value of securities of one of the world’s largest manufacturers of aircraft, space, and military equipment Boeing Co. fell to a 52-week low, losing 5.07% and ending trading at 120.70 points.
The stock of US pharmaceutical company SIGA Technologies Inc soared to its highest level, gaining 43.35% and closing at 12.40 points.
The capitalization of biopharmaceutical company Evofem Biosciences Inc. fell to an all-time low, losing 63.17% on Friday, and ending trading at 0.41 points.
As a result, on the NYSE, 1,670 securities declined and exceeded the number of those that rose in price estimated at 1,486. At the same time, the indicators of 140 shares remained unchanged. On NASDAQ stock exchange, quotations of 2,068 companies declined, 1,648 increased and 267 closed at the level of the previous session.
The CBOE Volatility Index, which is based on the S&P 500 options trading, rose by 0.27% to 29.43 points.