27.05.202217:21 Forex Analysis & Reviews: US stock market closes with huge gains. US Federal Reserve accounts for positive news

At the close of Thursday's trading session, major US indexes recorded huge gains due to strengthening of the technology as well as consumer service sectors.

Exchange Rates 27.05.2022 analysis

As a result, the Dow Jones Industrial Average rose by 1.61% to 32637.19 points and closed higher for the fifth straight trading session for the first time in two months. The S&P 500 broad market index gained 1.99% to 4,057.84 points, while the high-tech NASDAQ Composite surged by 2.68% to 1,740.65 points.

Largest gains and declines

The day before, shares of Boeing Co, Nike Inc and Home Depot Inc showed record gains among Dow Jones components. They advanced 4.65%, 4.38%, and 3.15% respectively.

Stock of Merck & Company Inc (-1.54%), Verizon Communications Inc (-0.49%) and Johnson & Johnson (-0.09%) recorded a dramatic decline. They fell by 1.54%, 0.49%, and 0.09% respectively.

Shares of Dollar Tree Inc (+21.87%), DXC Technology Co (+15.99%) and Dollar General Corporation (+13.71%) topped the list of gains among the S&P 500 index components in Thursday's trading.

Stocks of Kraft Heinz Co (-6.10%), Medtronic PLC (-5.78%) and Centene Corp (-4.01%) made modest gains.

The day before, the major gainers of the NASDAQ Composite index were shares of Creatd Inc, Apyx Medical Inc and Scisparc Ltd. They rallied 58.46%, 51.89%, and 41.10% respectively.

Stocks of Avadel Pharmaceuticals PLC, NRX Pharmaceuticals Inc and OTR Acquisition Corp recorded a sharp decline. They plunged by 68.34%, 58.19%, and 36.64% respectively.

Impact of corporate reporting

VMware Inc, one of the largest US business software makers, gained 3.2% in Thursday's trading, while semiconductor maker Broadcom's stocks jumped 3.6%.

Broadcom executives announced on Thursday that they would buy VMware for $61 billion. The payment will be made in stock and cash. Moreover, Broadcom will assume $8 billion of VMware's net debt.

The day before, another reason for Broadcom's market capitalization growth was the publication of quarterly reports. According to the report, the company's net profit increased by 1.7 times in the second fiscal quarter.

Airline carrier JetBlue Airways Corp. shares rose by 3.4%.

Shares of Chinese Internet giant Alibaba Group Holding soared by 14.8% the day before. In January-March 2022, the company increased its revenue by 9%, while its net loss tripled.

Software developer Splunk Inc stock added 4.9% on Thursday after the news came that the company's revenues had surged by 34% in February and April.

The market capitalization of Williams-Sonoma Inc, a seller of kitchenware, jumped 9%. The company generated net income and revenue that exceeded market expectations in the first quarter of the current fiscal year.

Department store chain Macy's Inc shares soared by 19.3%. In January-April, the company's net profit almost tripled.

The stock price of graphics processor maker Nvidia Corp jumped 5.2% the day before. The company generated record revenue in its first fiscal quarter, while its net income fell by 15%.

Stocks of cloud service provider Nutanix Inc plummeted by 23% despite the company reducing its net loss in February and April.Consequently, advancers (2,647) outnumbered decliners (555) on the NYSE. At the same time, the performance of 95 stocks remained unchanged. On NASDAQ, stock of 2849 companies gained, 982 companies lost ground and 217 firms closed at the level of the previous session.

The CBOE Volatility Index formed on the basis of S&P 500 options trading indicators, declined by 3.07% to 27.50 points.

The day before, the participants of the US stock market discussed the publication of the minutes of the FOMC meeting held on May 3-4. According to the document, the majority of the Fed's officials supported raising the interest rate by 50 basis points at the end of the next few meetings. After this news US investors calmed down as many of them feared a more significant increase in the discount rate.

Therefore, with approaching summer and the corporate reporting season coming to an end, there are fewer negative factors that could cause a sharp decline in the US stock market.

US financial markets will be closed on Monday due to the national holiday Memorial Day.

Irina Maksimova,
Analytical expert of InstaForex
© 2007-2022
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