To closing at 33,348.60, the Dow Jones Industrial Average (DJI) increased by 0.1%. Notably, 11 of the 30-stock index’s components finished in negative territory, while 19 finished in positive territory. A five-day losing streak was snapped by the blue-chip index.
Due to the robust performance of large-cap technology firms, the tech-heavy Nasdaq Composite ended the day at 12,365.21, up 0.7%. The tech-heavy index’s top gainer, Atlassian Corp. TEAM, rose 7.7%. The Zacks Rank for Atlassian is #3 (Hold). The full list of today’s Zacks #1 Rank (Strong Buy) stocks is available here.
The S&P 500 finished at 4,136.28, up 0.3%. The benchmark index’s 11 major sectors were divided into seven positive and four negative zones. While the Utilities Select Sector SPDR (XLU) fell 1.3%, the Materials Select Sector SPDR (XLB) increased by 0.9%.
The CBOE Volatility Index (VIX), a measure of fear, increased by 0.5% to 17.12. Less shares were traded on Monday (9.06 billion) than the previous 20 sessions’ average (11.1 billion). On the NYSE, advancers exceeded decliners by a ratio of 2.1 to 1. A 1.85-to-1 ratio favoured rising issues on Nasdaq.
On Tuesday, President Joe Biden and Speaker of the House Kevin McCarthy of the Republican Party are expected to start a vital debt ceiling discussion. There are only two weeks left before the United States government may not have enough money to pay its payments.
President Biden is quite hopeful that Congress will come to a consensus. Biden told reporters on Sunday, “I genuinely think there’s a willingness on their part, as well as on ours, to achieve a deal, and I think we’ll be able to accomplish it.
Treasury Secretary Janet Yellen issued a warning last week that the government could not be able to fulfil its obligations if a deal with Congress is not reached by June 1. But she stated, “I’m hopeful,” in an interview with the Wall Street Journal. I believe there is a lot of activity in the talks. They reportedly discovered some points of agreement.
In its preliminary assessment for May, the University of Michigan announced on May 12 that U.S. consumer sentiment hit a six-month low. The indicator dropped from its final reading of 63.5 in April to 57.7, which was the lowest value since November 2022. 63 was the average estimate.
The consumer’s perception of their current financial status was gauged by the present situation sub-index, which fell from 68.2 in April to 64.5 in May. The expectation sub-index, which gauges consumer expectations for the following six months, dropped from 60.5 in April to 53.4 in May.
Consumers’ expectations for near-term inflation increased in April from 3.6% to 4.6%, but they slightly decreased in May to 4.5%. But from 3% in April, inflation estimates over the following five years increased to 3.2%, the highest reading since 2011. According to the research, “consumers’ economic concerns increased in May along with the proliferation of bad economic news, including the debt crisis standoff.”
The American economy would suffer greatly from a big decline in consumer confidence. Consumer spending may decline as a result of low sentiment in the future. Consumer spending, which accounts for more than two thirds of the GDP, is the main engine of the American economy. A recession could be triggered by weak consumer spending.