After starting the week on a stronger note, the S&P 500 continued to strengthen and clocked the fifth consecutive positive day. On May 24, eight out of 11 major sectors of the S&P 500 closed the day positive—the materials sector and utilities sector supported the market’s strength.
Fed’s meeting minutes
According to the meeting minutes, the Fed plans to shrink its $4.5 trillion balance sheet. Until now, the central bank has been reinvesting the amount it gets from matured bonds. According to the new plan, the central bank will have a cap limit, which defines the amount to be rolled-off without investing. Any amount more than the cap limit will be reinvested. Regarding the pace of the interest rate hike, most of the Fed members think that the hike will happen “soon.” The interest rate hike could occur in June. Supporting economic data would improve the chances of an interest rate hike in the Fed’s June meeting. The market is looking forward to initial jobless claims scheduled to release today.
On May 24, the S&P 500 started the day higher and regained momentum after the release of the Fed’s meeting minutes at 2:00 PM EST. The S&P 500 closed the day at all-time high price levels. The S&P 500 VIX Index (CBOE Volatility Index) measures uncertainty in the market. On May 23, it fell 6.5% to 10.02. The VIX index is measured on a scale of 1–100 with 20 as the historical average. It’s also called the “fear index.” Generally, it moves opposite to stocks’ movements—it rises when the S&P 500 falls.
NASDAQ and Dow
Similar to the S&P 500 on Wednesday, the NASDAQ Composite Index and Dow Jones Industrial Average opened the day higher. On May 24, NASDAQ rose 0.4% and ended the day at 6,163.02. The Dow Jones Industrial Average rose 0.36% and closed at 21,012.42.
In the next part, we’ll discuss the top and bottom market movers on May 24.