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US equity indices fall two weeks in a row

The broad US equity indices ended the week lower on Friday, pressured by week economic data, banking stability concerns and uncertainty about the US debt ceiling situation. Meanwhile, technology stocks in the US have bucked the trend recently, with the Nasdaq-100 trading near its highest levels since August 2022.

Shane Strowmatt, LGT
Tempo di lettura
5 minuto
Stock market indices
© Shutterstock

The Dow Jones Industrial ended Friday’s session down only marginally at 33,300.62 points, but nevertheless lost 1.1% over the week. The S&P 500 lost 0.16% on Friday to close at 4,124.08 points, down 0.29% for the week. The tech-heavy Nasdaq-100 lost 0.37% in Friday trading to finish the week at 13,340.18 points. Despite Friday’s loss, the tech index finished the week in positive territory, up 0.4%.

Week economic data pressured markets at the end of the week, with the University of Michigan Consumer Sentiment Index coming in at 57.7 for May, the lowest reading in six months. The survey showed that consumers’ expectation for inflation for the next five years reached its highest reading since 2011 at 3.2%.

More US data released Friday showed that import prices increased for the first time since December 2022 in April. Import prices were 0.4% higher in April than in the previous month. Despite the spike in April, they were still down 4.8% when compared with the same month a year earlier. The main driver for the increased import prices were fuel prices, which were up 4.5% in April. Import prices are relevant for calculating the Consumer Price Index, which is closely watched by the Federal Reserve as a gauge of overall inflation.

In Europe, the UK economy just narrowly managed to record growth in the first quarter of the year, data released Friday showed. Gross domestic product in the first quarter grew by 0.1%, after growing at the same slow pace in the final quarter of 2022. The sluggish growth figure came just one day after the Bank of England raised rates to the highest level since 2008 in an effort to combat inflation, which was over 10% in March. The UK currently has the highest inflation among G7 nations and at the same time the slowest growth. It is the only G7 economy that is still smaller than its size prior to the 2020 outbreak of the Covid pandemic.

In Asia, markets were trading mixed at the start of the week with a focus on Thailand, where the opposition party was likely to win the elections. The Thai baht strengthened against the US dollar following the election results. Thailand’s Set Composite opened slightly higher, before dipping into negative territory on Monday. In mainland China, the Shanghai Composite was down 0.5%, and the Shenzhen Component gained 0.1%. Hong Kong’s Hang Seng Index and Japan’s Nikkei were both up around 0.7%.

Corporate news in focus: Quarterly figures from AXA, Siemens Energy, Porsche SE.

Economic data in focus: Swiss Producer and Import Price Index (08:30 CET), Eurozone industrial production (11:00), New York Fed US Empire State Manufacturing Index (14:30).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.