Wall Street says goodbye to May with gains

On Monday, the Memorial Day holiday is celebrated in the US, which will keep the stock market closed.

In the month as a whole, the Dow Jones Industrials advanced by 1.9%. The selective S&P 500 gained 0.6%. Both stock markets achieved their fourth consecutive month of gains. Meanwhile, the Nasdaq index has lost 1.5% of its value.

The Nasdaq breaks a streak of half a year in the green. It reflected a market rotation from high-value technology companies towards other small and medium-sized companies. 

The New York stock market seemed to follow the famous saying of Sell in May and go away to some extent. It went from registering records to experiencing several days of massive sales. However, it was mainly due to a fear of rising inflation that has been calming down.

Fear swept Wall Street when it emerged that year-on-year inflation in the United States stood at 4.2% in April. It’s the highest figure recorded since 2008. At the same time, the producer price index advanced by 6.2% year-on-year, its most significant increase since 2010.

Fears of the rise in inflation in the US

The Federal Reserve has insisted that the current pace of inflation is unlikely to be sustained after the initial burst of activity associated with the reopening of the economy. Despite considering that the price increase will be “transitory,” several central bank participants begin to discuss a plan to adjust the rate of purchase of assets if the economy continues to make “rapid progress.”

In addition, labor market data has reflected week-to-week improvements. Consumer spending has continued to increase as the Covid-19 vaccination campaign progresses.

Expectations that the recovery will accelerate in the short term have been reinforced by the announcement of the Biden Administration of its largest spending budget since World War II, six billion dollars.