Stock Market Soars to Record Peaks as Inflation Cools; Walmart (WMT) Surges Following Strong Earnings Report

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• The stock market rally had impressive gains following tame inflation reports and cooling economic data, with the Dow Jones, S&P 500, and Nasdaq composite all hitting record highs.
• Walmart, Alibaba, and Sea were among the significant earnings winners, boosting investor confidence.
• “This rally is a clear indicator of the market’s resilience and investor optimism,” noted a leading financial analyst.

This article discusses the recent stock market rally, highlighting key earnings winners and the impact of economic data on market trends.

Stock Market Rally Hits Highs

The Dow Jones, S&P 500, and Nasdaq hit record highs, with a large number of leading stocks flashing buy signals. Meme stocks skyrocketed, but slashed weekly gains. Investors cheered relatively tame inflation data and other economic reports. Treasury yields fell significantly on the economic data, but pared weekly losses.

Inflation Cools, Retail Sales Slow

Inflation moderated and retail sales slowed more than expected in April, providing hope that the Fed’s pivot to rate cuts will come in the third quarter. After three straight 0.4% monthly increases, the core consumer price index rose 0.3% in April, lowering the 12-month rate to 3.6%, a three-year low. After the PPI and CPI, economists estimated that the Fed’s primary inflation gauge, the core PCE price index, will rise 0.2%-0.25% when it’s released later this month. That’s still a bit high for the Fed. But it would back the idea that hot inflation to start the year was mostly a one-time adjustment. Meanwhile, retail sales were flat, trailing forecasts for a 0.4% gain. March’s gain was revised down slightly to 0.6%. Further, various manufacturing reports and housing starts came in below views.

Walmart Earnings Jump On E-Commerce

First-quarter earnings rose 22%, the second straight quarter of accelerating growth and the best gain in three years. Revenue rose 6% to $161.51 billion. Both beat views. Global e-commerce sales jumped 21%. Walmart-only same-store sales, excluding fuel, rose 3.8%. The Dow discount giant said it’s winning over more higher-income customers, while high-margin ad revenue doubled. Walmart raised full-year views. Shares jumped.

Sea Rides E-Commerce Wave

Singapore-based internet services company Sea Limited (SE) reported better-than-expected first quarter revenue of $3.7 billion, up 23%. Investors shrugged off an earnings loss that was slightly wider than expected. E-commerce revenue growth accelerated to 33% year over year, a sign that Sea’s Shopee business is fending off growing competition from Temu, AliExpress and others. After a rough 2023, Sea stock surged to a 70% gain so far in 2024. Shares rose solidly to an 11-month high.

Conclusion

This week’s stock market performance, marked by record highs and significant earnings reports, suggests a robust economic outlook despite some underlying challenges. Investors should keep an eye on inflation trends and retail performance as indicators of future market directions.

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