Weekly Economic Update – 06/18/2024

The Week on Wall Street

Stocks notched a solid gain last week, driven by the Fed’s decision, May’s inflation report, and Apple’s AI-related news.

The Standard & Poor’s 500 Index rose 1.58 percent, while the Nasdaq Composite picked up 3.24 percent. The Dow Jones Industrial Average, which has lagged most of the year, slid 0.54 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, fell 1.44 percent for the week through Thursday’s close.1

S&P 500, Nasdaq Lead; Dow Lags

Market leadership took a familiar form. The tech-heavy Nasdaq led while the Dow trailed for the second week (and four out of the past six weeks).2

Stocks trended higher at the start of the week as investors cheered an artificial intelligence update from Apple.3,4

By midweek, the market had split, with the Nasdaq and S&P 500 moving higher while the Dow lagged. Investors were upbeat after learning that consumer prices rose less than expected in May and that the Fed decided to keep rates steady. However, some investors were unsettled after learning Fed officials had shifted their outlook and now only penciled in a single rate cut between now and year-end. A few months ago, the Fed had indicated as many as three cuts were possible.5

Busy Week for News

Last week was chock full of market-moving events. Between Apple’s AI update, inflation, and the Fed, it was a toss-up which one influenced sentiment the most.

AI’s outsized role in driving market momentum continued last week. OpenAI’s deal with Apple arrived at the start of last week, and the news followed OpenAI’s deal earlier this year with Microsoft. (These companies are mentioned for illustrative purposes only; it is not a recommendation to buy, sell, or hold this or any security.)6

Wednesday morning, the Consumer Price Index (CPI) was announced. A few hours later, the Federal Open Market Committee updated its monetary policy. Those pieces of news have only arrived together 13 times since 2008.

Weekly Riddle

It can be told, made, cracked, and played. What is it?

Last week’s riddle: You hold a sheet of cellophane. Fully unfolded, it is 3 feet long by 2 feet wide. How can you get two people to stand on it (fully unfolded) so they can’t touch or see each other?

Answer: Slide the fully unfolded sheet under a door (or a sufficiently large partition that is not transparent or opaque) and have each person stand on the sheet on either side of the door or partition.

John Dombroski Jr. may be reached at (480) 991-1055 or [email protected]
www.grandcanyonplanning.com

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