Top line
Result April rains May brought flowers for the stock market, as major indexes shook off the April sell-off and continued their upward trajectory on Tuesday, with the tech-heavy Nasdaq Composite closing at its highest price ever.
Stocks have erased their April decline.
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Key facts
The Nasdaq's 0.8% rise on Tuesday took it to an all-time high of 16,511, surpassing the previous April 11 record of 16,442.
The benchmark S&P 500 index (up 0.5% on Tuesday) and the Dow Jones Industrial Average (up 0.4%, or 140 points) closed just below their respective closing highs set on March 28.
All three major indexes rose strongly in May: the Nasdaq gained 5.4%, the Dow 4.6% and the S&P 4.2%.
Leading the May rally for the market-cap-weighted Nasdaq and S&P were once again huge tech companies, as each of the $6 trillion West Coast companies is up at least 5% so far. so far this month, led by the 10% gain in Apple shares; Gains of about 7% for the two top-weighted stocks in the stock-price-weighted Dow, UnitedHealth and Goldman Sachs, fueled the Dow's rally.
Key background
April was the worst month for the Dow Jones since September 2022 and the S&P and Nasdaq's worst months since September 2023. That sell-off came as concerns about the effects of persistent inflation and its potential to prop up interest rates for longer than expected, concerns that still prevail long before Wednesday's release of April inflation data. But investors showed renewed optimism about companies' earnings potential even in the face of a high rate environment, and the batch of quarterly earnings in recent weeks revealed what would be the best quarterly earnings growth since the second quarter of 2022. according to FactSet.
Tangent
The broader market rush coincided with the resurgence of meme stocks, as stocks of 2021 meme dear values AMC and GameStop are up 135% and 179%, respectively, this week thanks primarily to social media noise.
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