Market Today: Cisco Surges on Strong Guidance, Major Hedge Fund Portfolio Updates

Market Summary

The major U.S. stock indices, including the S&P 500 (+1.2%), Nasdaq Composite (+1.4%), and Dow Jones Industrial Average (+0.8%), ended the day at or near record highs. This positive momentum was largely in response to the April Consumer Price Index (CPI) data, which indicated a slight easing in inflation.

Inflation Data and Market Response

The April CPI report revealed a year-over-year decrease in both total CPI (to 3.4% from 3.5%) and core CPI (to 3.6% from 3.8%). This data follows three consecutive months of higher-than-expected CPI figures and other reports suggesting persistent price pressures. Consequently, market rates dropped significantly, with the 10-year note yield falling nine basis points to 4.36% and the 2-year note yield decreasing eight basis points to 4.74%.

Retail Sales and Rate Cut Expectations

April's retail sales data showed a slowdown in consumer spending. Following this, the likelihood of a rate cut by the Federal Reserve in September increased to 75.3% from 65.1% the previous day, as per the CME FedWatch Tool.

Stock Market Performance

Broad gains were seen across many stocks. The information technology sector led the gains, closing up 2.3%, with significant contributions from semiconductor companies NVIDIA (NVDA) and Broadcom (AVGO). Conversely, the consumer discretionary sector was the weakest performer, largely unchanged from the previous day, impacted by declines in Tesla (TSLA) and Amazon. (AMZN)

Meme Stocks and Profit-Taking

Meme stocks like GameStop (GME) and AMC Entertainment (AMC) experienced notable declines due to profit-taking after recent substantial increases.

Economic Indicators and Future Data Releases

Today's economic indicators included the Weekly MBA Mortgage Applications Index and April's CPI and retail sales data, which showed a cautious consumer spending pattern. Upcoming data releases will feature weekly jobless claims, housing starts, building permits, and the Philadelphia Fed survey.

Global Markets and Commodities

In international markets, European indices saw modest gains while Asian markets were mixed. Commodity prices varied, with increases in crude oil, natural gas, gold, silver, and copper.