THE GIST (“THE WHAT”)
Struggling for direction, the S&P 500 index closed the choppy session near its highest level since August 2022 at 4283.86, up 10.06 points (0.24%). The index settled just 10 points shy of entering a new bull market on the back of strong rally that was primarily led by a few mega-cap technology stocks as investors flocked to AI names. Stronger than expected earnings seasons and increasing odds of Fed’s rate hike pause this month further supported the rally.
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Last Hurray of the Bull, or the Next Leg Up, Day 2
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THE DETAILS (The “How & Why”):
Today’s gains were led by regional bank stocks alongside higher bond yields after the Former Fed Vice Chair Clarida said that the Fed could likely raise interest rates in June and is “unlikely” to start cutting rates until 2024. The 10-year Treasury bond settled 1.0 bp higher at 3.693%. Comerica Inc was the stronger performer of the session, up sharply by 7.14%. Fifth Third BankCorp, KeyCorp and Zions Bankcorp all gained more than 5% each.
Intel Corp was another strong gainer, up 3.68% on reports that the chipmaker plans to sell its stake in the self-driving technology company Mobileye for $1.48 billion. Advanced Micro Devices also jumped 5% after Piper Sandler raised its price target to $150 from $110.
Meanwhile, oil prices eased, giving back some of the previous session’s strong gains after Saudi Arabia announced its plan to slash oil production by 1 million barrels a day. Brent crude fell 0.5% to settle the day at $76.29 a barrel.