The S&P 500 (SPY) rebounded on Friday and recovered most of the losses incurred last week. Carrying forward the strength, the S&P 500 opened higher on Monday and closed at the highest daily close since April 19. On May 7, seven out of 11 major S&P 500 sectors closed the day higher. The market was supported by strength in the IT, industrials, and financials sectors. Weakness in consumer staples and telecom services limited the market gains.
The market sentiment was weak last week amid increased speculations about more interest rate hikes in 2018. However, the market sentiment in US markets improved on Monday amid a surge in crude oil prices. Decreased geopolitical concerns and the release of stable economic data improved the market sentiment. Oil prices rose as President Trump indicated that the US might pull out of the Iran nuclear deal. According to President Trump’s tweet, the decision on the Iran nuclear deal will be announced at 2:00 PM EST on Tuesday.
The CBOE Volatility Index (or VIX) measures uncertainty in the market. The index declined 0.14% to 14.75 on May 7. The index is measured on a scale of one to 100 with 20 as the historical average. The VIX is also called the “fear index.” Usually, the index has an inverse relationship with stocks and rises when the S&P 500 falls.
NASDAQ and Dow
The NASDAQ Composite Index (QQQ) and the Dow Jones Industrial Average (DIA) opened higher on Monday and started the week on a stronger note. The tech-heavy NASDAQ Composite Index moved higher amid strength in tech stocks on Monday. The NASDAQ Composite Index gained 0.77% and closed the day at 7,265.21. Amid the market’s improved risk appetite, the Dow Jones Industrial Average gained 0.39% and closed the day at 24,357.32.
Next, we’ll discuss how the US Dollar Index and Treasury yields performed in the early hours on May 8.