Wall Street Climbs to New Highs as Investors Look Past Inflation Concerns

U.S. stocks opened last week with notable momentum, pushing the Dow, the NASDAQ and the S&P 500 to record highs by mid-week. Investors apparently ignored lingering inflation and a politically charged Federal Reserve. The S&P 500 notched its eighth straight week of gains; its longest streak since 2023. Last week’s market performance highlighted a disconnect between Wall Street and Main Street as stocks rose despite consumer sentiment plummeting. After a brief period of profit-taking on Thursday, stocks stabilized and rallied on Friday. Strong first-quarter earnings reported by a major AI firm helped pull lagging tech shares into positive territory by week’s end. Leading the market sectors were Consumer Discretionary, Health Care, Real Estate and Utilities. Communication Services, Materials, Consumer Staples and Industrials underperformed. Crude oil prices fell on hopes that the U.S. and Iran could reach a diplomatic agreement.

Gas Prices Ease Slightly, Remain Sharply Higher Year Over Year

The national average retail price for regular gasoline was $4.490 per gallon on May 18, $0.010 per gallon below the prior week’s price but $1.317 per gallon higher than a year ago. Also, as of May 18, the East Coast price decreased $0.031 to $4.305 per gallon; the Midwest price dipped $0.006 to $4.399 per gallon; the Gulf Coast price fell $0.002 to $3.951 per gallon; the Rocky Mountain price increased $0.215 to $4.587 per gallon; and the West Coast price declined $0.008 to $5.605 per gallon.

Eye on the Week Ahead

The second estimate of first-quarter gross domestic product is available this week. The initial report had the economy expanding at an annualized rate of 2.0%. Also out this week is data on consumer prices for April. For the 12 months ended in March, consumer prices rose 3.6%.