Wall Street Close: Snaps three-day fall as bears recheck reflation risk

All three Wall Street benchmarks closed positive for the first time in the week.
Strong US Jobless Claims tamed US PPI woes, Fed comments, covid restriction updates in the US also favored bulls.
DJI30 jumped over 400 points, S&P 500 gained +2.0% daily.
US Retail Sales become the key amid inflation anxiety.

Anil Panchal FXStreet

Thursday turned out to be the much-awaited good day for the US equity markets after Jobless Claims dropped to a 14-month low. Also favoring the market sentiment were comments from the US Federal Reserve (Fed) officials and the US CDC comments over mask mandate. In doing so, the bulls battle reflation woes backed by strong PPI figures ahead of the key US Retail Sales data.

US Initial Jobless Claims for the week ended on May 07 slipped beneath 490K forecast versus 473K previous readouts while testing the pre-pandemic low. On the other hand, the Producer Price Index (PPI) for April rose past 4.2% prior and 5.9% expected to 6.2% YoY.

Following the data, a slew of Fed policymakers rushed to highlight the jump in jobs report after last Friday’s NFP debacle. The US central bank members also signaled that “several more months of data” are required to confirm changes to the Fed’s policies.

It’s worth mentioning that growth stocks were a bit jittery and Tesla bears the burden of its seesaw on cryptocurrencies while prices of Home Depot gained.

Against this backdrop, Dow Jones Industrial Average (DJIA) gained 1.3% or 433.79 points to mark its first positive day of the week by closing around 34,021.45. Further, the S&P 500 added 49.46 points or 1.2% to end the day near 4,112.50 while the Nasdaq finished the day’s trading at 13,124.99, up 0.7% or 93.31 points.

Elsewhere, WTI dropped on Colonial Pipeline restart while gold recovered. Further, the US dollar index (DXY) eased amid downbeat Treasury yields.

Looking forward, investors will keep their eyes on the US Retail Sales for April, expected 1.0% versus 9.7% prior, as well as the preliminary readings of the Michigan Consumer Sentiment Index for May, forecast 90.4 compared to 89.3 previous readouts.

Although the consumer-centric figures are likely to remain firm, the Fed’s defense to easy money will be the key.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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