S&P 500 Faces Obstacle After Winning Streak: Market Recap

Wall Street’s Winning Streak Comes to an End

After a four-day winning streak that propelled the market to its longest run since March, Wall Street’s enthusiasm for stocks has started to fade. The S&P 500 struggled to maintain its momentum, remaining below the 5,200 mark it briefly touched earlier in the week. Leading the losses in megacaps were Nvidia Corp. and Tesla Inc., while Uber Technologies Inc. tumbled on disappointing first-quarter bookings. Intel Corp. also slumped after weakening its revenue outlook due to a US ban on chip exports to Huawei Technologies Co.

Analysts at Bespoke Investment Group noted that the recent market conditions have created a perfect excuse for investors to take a step back and reassess their positions. Citigroup Inc. strategists also pointed out a lack of conviction among investors to fully embrace the recent bounce in US stocks, indicating that the market is far from turning fully bullish.

Despite the recent rally bringing the S&P 500 close to its all-time high, concerns remain about the narrowness of the bounce off April’s lows. Matt Maley at Miller Tabak + Co. emphasized the importance of broadening the rally to sustain positive momentum in the market.

Looking ahead, investors are eagerly awaiting key economic indicators, such as inflation figures due next week, to gain insights into the future direction of stocks. The recent pullback in the market has raised questions about the sustainability of high valuations and the need for stronger growth prospects to justify current levels. As the Federal Reserve extends the timeline for potential interest rate cuts, investors are cautiously optimistic about the outlook for equities in the coming months.