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Nasdaq Hits Record High as Markets Weigh Fed Officials' Comments
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Nasdaq Hits Record High as Markets Weigh Fed Officials' Comments
May 20, 2024 2:37 PM

04:59 PM EDT, 05/20/2024 (MT Newswires) -- The Nasdaq Composite closed at a record high Monday while the other two benchmark equity indexes in the US were mixed as markets parsed remarks by Federal Reserve officials.

The technology-heavy Nasdaq rose 0.7% to 16,794.9, while the S&P 500 gained 0.1% to 5,308.1. The Dow Jones Industrial Average fell 0.5% to 39,806.8 after closing above 40,000 for the first time on Friday. Among sectors, tech led the gainers, while financials saw the steepest decline.

Fed Vice Chair Philip Jefferson said it's likely "too early" to say if the recent slowdown in the disinflationary process will last for long. Although consumer spending has been strong over the last several quarters, Jefferson said he expects growth to slow later in 2024 as higher interest rates hit demand, especially interest-sensitive spending.

Separately, Fed Vice Chair for Supervision Michael Barr said the current restrictive monetary policy likely needs additional time to help policymakers achieve their inflation target.

On Friday, Fed Governor Michelle Bowman said that while the current monetary policy stance is likely restrictive, she is willing to increase interest rates at a future meeting should incoming data suggest that progress on inflation has stalled or reversed.

In a bid to tame inflation, the central bank's Federal Open Market Committee raised interest rates by 525 basis points from March 2022 through July 2023. It has held rates steady since then, with its latest pause coming earlier this month.

The US 10-year yield rose 2.7 basis points to 4.45% Monday, while the two-year rate added 2.3 basis points to 4.85%.

Minutes from the FOMC's May policy meeting are scheduled to be released Wednesday.

"While the Fed remains focused on eventual rate cuts, investors will be looking for any indications of a consideration of a less favorable scenario," Stifel said in a Monday note. "Is the Fed even considering the possibility of inflation remaining elevated or worse pushing higher still? At what point is the Fed willing to not just delay rate cuts, but potentially consider reengaging with additional rate hikes?"

West Texas Intermediate crude oil fell 0.5% to $79.64 per barrel Monday.

In company news, Norwegian Cruise Line ( NCLH ) raised its full-year earnings outlook amid robust demand conditions, while the cruise operator unveiled financial targets for 2026 as part of a new strategy to enhance shareholder returns. The company's shares jumped 7.6%, the top gainer on the S&P 500.

Jabil ( JBL ) was among the best performers on the S&P 500, up 5.2%. The manufacturing solutions provider named Michael Dastoor as chief executive following an internal investigation into "corporate policies." The company pulled its fiscal 2025 guidance amid the unexpected leadership transition.

JPMorgan Chase ( JPM ) Chief Executive Jamie Dimon reportedly told shareholders the timetable for his retirement is no longer five years away, saying that succession plans are "well on the way." The banking giant's shares fell 4.5%, the steepest decline on the S&P 500 and the Dow.

Gold rose 0.5% to $2,430.10 per troy ounce, while silver jumped 2.3% to $31.97 per ounce.

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