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Traders ushered in strong gains as the new month kicked off. The major average saw record closes for much of the week. However, there was continued selling pressure and increased volatility. Much of that came via technology stocks. Traders did amp up selling pressures on many growth stocks this week. A combination of rising inflation expectations, mixed economic data and guidance set the stage for hefty price swings.
For starters, earnings have been positive with the bulk of firms reporting this season, coming in higher than expected. However, many firms have warned about higher inflationary pressures on their bottom lines and continued future guidance figures. Traders once again resumed selling growth stock names, as expectations about what the Fed will do with regards to interest rates. While a speech by Fed Chair Jerome Powell this week was reassuring, it did throw a lot of caution into the marketplace.
As did data on the week. Key measures of manufacturing and consumer health gave a mixed picture on the economy. Many of the sharp increases to economic data we’ve seen lately stalled last week. This gave traders pause that the economy could be slowing.
All in all, though, stocks spent much of the week trending higher as traders digested the week’s news and earnings reports.
Be sure to check out our previous Wrap here, when new stimulus hopes moved the markets higher.