THE GIST (“THE WHAT”)
Markets remain in a holding pattern with the debt ceiling negotiations expected to resume tomorrow. S&P 500 index closed the first trading day of the week with modest gains of 12.20 points at 4136.27 (+0.30%) amid hopes that the negotiations could result in some resolution in order to avoid a default as a deadline looms.
Note: Our daily “S&P 500 Trading plan” will be posted around 9:30/10:00am EDT, every trading day.
For the Trading Plans published this morning, please click here
For the last published Results of the Morning Trading Plans, please click here
THE DETAILS (The “How & Why”):
Regional banks attempted to rebound from their recent sharp losses. Zions Bancorp, Comerica and KeyCorp, all jumped more than 6% each. Charles Schwab Corp closed higher by more than 4% following stock upgrade by Raymond James. Western Digital Corp was the best performer of the session, rallying 11% on merger talks with Kioxia that the company expects to unlock value of its flashship memory business. Chip stocks also closed with modest gains.
Meanwhile, on the economic data front, Empire State Manufacturing survey for May indicated a collapse in manufacturing activity, falling more than expected to a 4-month low in the month of April.
Hawkish comments from Fed President Kashkari that the Fed might have a long way to go before getting the inflation down to its targeted 2% rate pushed the yields higher, weighing down on stocks at the open. Defensive utility sector traded lower alongside rising yields. Investors will be closely monitoring Fed Chair Jerome Powell’s scheduled speak on Friday, looking for cues on the path of interest rates going forward.