✅ Written by Austin DeNoce, Markets Reporter, Walk-On Holdings

✅ Edited by Casimir Stone, Creative Director Walk-On Holdings

This Week in US Markets: Record Highs, Rate Cut Hopes, and Corporate Moves

In U.S. markets this week, both the S&P 500 and Nasdaq Composite notched fresh record highs on Thursday, on the back of softer labor market data that helped boost investor confidence around rate cut expectations. Both saw slight corrections on Friday, but still closed in the green on the week. 

On Monday, job openings for April were released, falling to their lowest level since February 2021. Then, on Wednesday, the ADP employment report came in weaker than expected, showing the private sector added just 152,000 jobs in May, compared to the 175,000 expected. This led investors to believe the Federal Reserve may be inclined to cut rates sooner rather than later.

Later in the week, markets got more employment data from Challenger, Gray & Christmas, which showed U.S. employers announced 1.5% fewer layoffs in May at roughly 64,000. Additionally, initial claims rose to 229,000, the second-highest level of the year.

However, Friday’s jobs report showed the U.S. added roughly 80,000 more jobs than expected in May at 272,000, which brought rate cut expectations and markets back down to earth. Yet, on the same day, the unemployment rate edged higher to 4%. In other words, labor data on the week was decidedly mixed. 

In other economic news, ISM manufacturing PMI showed the second-straight contraction in manufacturing activity, the 18th contraction out of the last 19 months. However, the ISM services PMI released the next day showed business activity rose more than expected in May, hitting a nine-month high following a contraction in April.

On Thursday, the U.S. trade deficit for April was released, showing an increase to its highest level since mid-2022 at $74.6 billion. The wider deficit was largely due to a greater number of imports of motor vehicles, computers, and industrial supplies. Finally, mortgage demand fell for the second consecutive week as the 30-year mortgage rate rose to 7.07%.

In company news, NVIDIA announced a new AI chip called Rubin, sending its shares to a new record close and briefly bringing its market capitalization above Apple’s, making it the second-largest company in the world by market cap and the third U.S. company in history to breach a $3 trillion valuation. Competitor AMD also announced its own series of new chips and processors, but its shares closed down on the week. 

Elsewhere, oil and gas companies also fell to start the week after OPEC+ extended most of its 5.86 million production cuts through 2025. Spotify announced a subscription price increase, which it says will be used to invest in its product features.

In entertainment, Spotify announced a hike in subscription prices, which it plans to invest in new product offerings. Warner Bros. Discovery also raised prices for ad-free plans on its Max streaming service by $1. Meanwhile, The Wall Street Journal reported Comcast is nearing a TV deal with the NBA to show around 100 games per season, with roughly half exclusively aired on Peacock.

In retail, shares of Bath & Body Works tumbled following a lackluster profit forecast. Lululemon reported weak guidance for the current quarter but still managed to see a pop in its shares after stronger-than-expected earnings results. Discount giant Dollar Tree said it was exploring a potential sale or spin-off of its lagging Family Dollar chain. 

In other company news, Hewlett-Packard’s stock rallied after surpassing earnings estimates, citing strong AI server demand. An ongoing dispute over transaction fees led eBay to announce that it would no longer accept American Express cards.

The union representing American Airlines flight attendants rejected a proposal to increase wages by 17% and warned of a potential strike in the coming weeks. Elsewhere, Taiwanese-based chipmaker TSMC reported a 30% increase in its May sales, Eli Lilly’s stock pushed to another record high, and Apple shares edged higher in anticipation of its Worldwide Developers Conference scheduled for Monday.

Finally, GameStop shares surged after the pseudonymous trader “Roaring Kitty” shared on social media that he held five million shares and 120,000 call options in the company.

The rally continued on Thursday after Roaring Kitty scheduled his first YouTube livestream in roughly four years. However, on Friday, the company’s shares saw their biggest daily decline in more than three years after reporting a larger-than-expected decline in sales and announcing the sale of an additional 75 million shares.