Stocks ended the turbulent week in the red, with the technology benchmarks Nasdaq Composite (NDAQ) and Nasdaq-100 (NDX) leading the declines. Despite a down week, indexes rounded out a strong month, with the S&P 500 (SPX) registering its best May since 2009 and the Nasdaq clocking its strongest May since 2003.
Technology stocks suffered a pullback in investor confidence last week, as post-earnings selloffs in Salesforce and Dell Technologies added to worries that high-flying tech stocks have run too hot. However, a benign PCE report, coupled with the reduced Q1 2024 GDP growth estimate, suggested that the Fed’s restrictive policy may be succeeding in cooling down the economy, which would result in a continued inflation downtrend.
This week, investors will focus on several important economic reports that will be incorporated into the Federal Reserve’s future policy considerations. With the central bank in a blackout until its June 12th meeting, market participants will try to translate incoming economic data, specifically Friday’s crucial job market reports, into an actionable stock outlook. Currently, markets assign the highest probability to a single interest rate cut in December.
Three Economic Events
Here are three economic events that could affect your portfolio this week. For a full listing of additional economic events, check out the TipRanks Economic Calendar.
» May’s ISM Manufacturing PMI – Monday, 06/03 – This report shows business conditions in the U.S. manufacturing sector and serves as a significant indicator of the overall economic conditions. PMIs are considered one of the most reliable leading indicators for assessing the state of the U.S. economy, helping analysts and economists anticipate changing economic trends.
» May’s ISM Services PMI – Wednesday, 06/05 – This report shows business conditions in the U.S. services sector, which contributes over 70% of the U.S. GDP. PMI indices are leading economic indicators used by economists and analysts to gain timely insights into changing economic conditions, as the direction and rate of change in the PMIs usually precede changes in the overall economy.
» May’s Nonfarm Payrolls and Unemployment Rate – Friday, 06/07 – The Nonfarm Payrolls and Unemployment reports present the number of new jobs created during the previous month, along with the percentage of people actively seeking employment in the previous month. These reports are two of the most important economic indicators, as policymakers follow the shift in the number of positions since it is strongly associated with the overall health of the economy. One of the Federal Reserve mandates is full employment, and it considers labor market changes when determining its policy decisions.
For more exclusive market insights and content from TipRanks Macro & Markets research analyst Yulia Vaiman, click here.
