Closing: The Dow closed above 40,000 for the first time All three major stock indexes posted gains this week

In the early morning of the 18th, Beijing time, U.S. stocks closed mixed on Friday. All three major stock indexes posted gains this week. The Dow closed above the 40,000 mark for the first time. Markets are assessing hawkish rhetoric from a number of Fed officials and the Fed's monetary policy outlook.

The Dow rose 134.21 points, or 0.34 percent, to 40,003.59, the Nasdaq fell 12.35 points, or 0.07 percent, to 16,685.97 and the S&P 500 added 6.17 points, or 0.12 percent, to 5,303.27.

All three major U.S. stock indexes posted gains this week. The Nasdaq rose 2.11% and the S&P 500 rose 1.54%, both rising for the fourth consecutive week. The Dow rose 1.24% for the week, marking its fifth consecutive week of gains.

In intraday trading on Thursday, the Dow rose as high as 40,051.05 points, a record intraday high, breaking through the important psychological level of 40,000 points for the first time in history.

Todd Morgan, chairman of Bel Air Investment Advisory, said: "The Dow Jones has risen significantly beyond the expectations of many, myself included. But our view remains the same, in the face of wars, recessions, elections, impeachment, financial crises, etc., long-term investment in quality stocks is the key to building wealth. ”

Thomas Martin, senior portfolio manager at Globalt Investments, said that the recent US stocks have hit record highs, the Dow Jones has exceeded 40,000 points, and the S&P 500 index has exceeded 5,300 points for the first time, and these milestones have appeared in the market's hope that the currency rate has peaked.

He added that continued optimism about AI and corporate earnings growth is also helping to propel the market into higher uncharted territory.

The first earnings season for U.S. stocks is coming to an end, and no major financial reports are expected to be released in the near future.

This week, U.S. stock market traders closely followed the speeches of Fed officials with the outlook for the Fed's future monetary policy. A number of Fed officials have made hawkish comments this week, saying they should keep borrowing costs higher for longer and saying they are waiting for more evidence that inflation is slowing.

The Fed's "three-in-command" New York Fed President Williams, Cleveland Fed President Mester and Richmond Fed President Barkin respectively said that the US Fed should keep borrowing costs higher for longer as policymakers await more evidence that inflation is easing, suggesting that they are not in a hurry to cut interest rates.

In addition, Atlanta Fed President Bostic welcomed the signs of cooling inflation in the latest CPI report this week. But he noted that he will be watching the May and June data to be confident that the downward trend in inflation will not reverse.

UBS expects the Fed to cut interest rates twice this year. "The Fed funds futures market is now pricing in a Fed rate cut of about 51 basis points in 2024, which is consistent with our own base case of two 25 basis point rate cuts by the Fed starting in September this year," the bank's strategists commented. ”

"U.S. retail sales in April came in lower than expected (flat compared to 0.4% growth expectations), which, combined with downward revisions in previous months, supports our view of a soft landing," UBS said. ”

UBS believes that Fed Chair Powell's speech on Tuesday reaffirmed the Fed's data-dependent approach and expects the Fed to cut interest rates by 50 basis points this year if the favorable data persists.

"We expect the 10-year Treasury yield to fall to 3.85% by the end of the year and maintain our optimistic outlook for high-quality bonds and high-quality equities," UBS said. ”

This week's US economic data showed mixed results. Initial jobless claims released on Thursday rose to 222,000, higher than expectations of 219,000, indicating a slight weakness in the labor market. The number of building permits fell from 1.49 million to 1.44 million, indicating a slowdown in future construction activity.

The Philadelphia Fed manufacturing index fell sharply to 4.5, below expectations of 7.7 and 15.5 previously, indicating a slowdown in the manufacturing sector.

JPMorgan Chase CEO Jamie Dimon warned again on Friday that inflation is worse than thought. He said the market is underestimating how long inflation is likely to persist because of a range of factors that will keep prices rising, and "I don't think underlying inflation will go away as people expect."

"I think we have a lot of inflation in front of us that could make inflation a little bit higher than people expect," Dimon said. ”

Stocks in focus

Tesla on Friday (May 17, 2024) raised the price of the Model 3 high-performance version again, with the price rising by another $1,000 to $54,990. Previously, the company announced the new Model 3 Performance Edition on April 24, with an initial price of $52,990. Just three days later, Tesla made a price adjustment to the new model, increasing it by $1,000. This is the second increase.

On Thursday, Tesla's planned expansion of its factory in Grünheide, near Berlin, Germany, was approved by a local parliament after it was opposed by local residents.

It has also been reported that Tesla has been working on plans to set up a data center in China to train the algorithms needed for FSD. According to the report, Tesla is still trying to obtain approval from Chinese regulators. If Tesla can find a workaround and offer the full version of FSD in China, it will be able to increase revenue and profit margins in China.

Microsoft Corp. recently announced plans to offer AMD's AI chips through its Azure cloud computing service, a move designed to compete with components made by Nvidia. Microsoft will announce more about this at the Build developer conference.

Microsoft's move is offering customers an alternative to Nvidia's H100 series GPUs. NVIDIA's H100 series dominates the AI data center chip market, but supply is tight due to high demand.

Britain's antitrust authority said on Friday that Microsoft's collaboration with French artificial intelligence startup Mistral AI did not qualify for an investigation. In April, the UK's Competition and Markets Authority (CMA) conducted an analysis of the deal to determine whether it warranted an investigation. The CMA said in a statement on Friday that the transaction does not require an investigation under the merger provisions of the Companies Act 2022. At the same time, the EU antitrust authorities are still analysing the deal.

This Wednesday, Google held its annual I/O developer conference. At the conference, Google updated and upgraded the Gemini 1.5 Pro version and launched the Gemini 1.5 Flash lightweight small model. At the same time, Google released Veo, a video generation model that benchmarks OpenAI's Sora, and an advanced visual and conversational response agent project called "Astra". In addition, Google officially launched the "AI Overviews" search function, which will directly summarize the search results.

Shares of GameStation plunged as the company said it could sell up to 45 million Class A shares.

Reddit has a partnership with OpenAI.

Take-Two's new game came on market later than expected, lowering its pre-order guidance for FY2025.

Elsewhere, West Texas Intermediate (WTI) crude futures for June delivery on the New York Mercantile Exchange rose 83 cents, or 1.05%, to settle at $80.06 a barrel.