*Meanwhile, West Texas Intermediate crude for July delivery fell 0.4% to finish at $114.67 a barrel Tuesday after the European Union reached a watered-down agreement that will partially ban imports of Russian oil. For the month of May, the U.S. oil benchmark climbed 9.5%.*
The stock market doesn’t like higher oil prices as that feeds into concerns over high inflation, as consumers worried about paying more for gas could pull back spending in other areas of the economy, said Sosnick.
*At the start of May, the Federal Reserve hiked interest rates by half a percentage point in a bid to tamp down generationally hot inflation. Recession fears have mounted as market participants fear the Fed’s policy tightening will trigger an economic decline.*
*“Higher inflation and slower growth are now the consensus view but that doesn’t mean it’s fully discounted,” Morgan Stanley’s Mike Wilson said in a note Tuesday.*
*Disappointing quarterly reports in May from the likes of Walmart and Snap showed inflation hurting American consumers and eating into corporate profits.*
*Investors also eyed the continuing war in Ukraine and Covid outbreaks in China, raising concerns about global commodities and supply chain challenges.*
Stocks struggled during the month amid the negative cross currents. The S&P 500 on May 20 dipped into bear-market territory briefly, falling 20% below its high at one point during the session. Meanwhile, the Dow saw its longest weekly losing streak since 1923, falling for eight consecutive weeks before last week’s rally.
Last week, the Dow and the S&P 500 notched their best weekly gains since November 2020. The blue-chip average closed up 6.2% for the week, ending an eight-week losing streak. The S&P 500 gained 6.5%, and the Nasdaq added 6.8% on the week, ending positive after seven continual weeks of losses.
Still, stocks remain well off their highs. The Dow is 10.7% below its record. The S&P 500 is down 14.2%, and the Nasdaq is off by 25.5%.
*Bear markets are incredibly difficult to navigate, because they are inherently volatile and prone to sharp upside rallies*
In corporate earnings, Salesforce, HP and Victoria’s Secret are expected to report results after the closing bell Tuesday.
Among individual stock moves, Deutsche Bank AG slipped after the lender and its asset management unit had their Frankfurt offices raided by police. Unilever Plc jumped as activist investor Nelson Peltz joined its board. US energy stocks rose following the advance in crude oil prices. And US-listed Chinese stocks also climbed, on track to wipe out their monthly losses as easing in lockdown measures
*Despite a potential strong finish to a historically weak month, the SPX is still coming into June with a loss of more than 10%. The good news is that for similar performance years, the index has historically rebounded into year-end. For years with losses of more than 10% from January to May, the SPX has posted average and median June to December returns of 6.3% and 5.8%, respectively.*
*Elsewhere, Bitcoin was back above $32,000 as investors and strategists said the digital currency is showing signs of bottoming out*
*Which companies were in focus?*
Shares of Yamana Gold Inc. gained 3.7% after Gold Fields Ltd. announced a $6.7 billion deal for the Canadian miner.
In Asia, the Shanghai Composite closed 1.2% higher Tuesday for a monthly gain of 4.6%. The Hang Seng Index rose 1.4% in Hong Kong Tuesday, advancing 1.5% in May. Japan’s Nikkei 225 edged down 0.3% Tuesday and rose 1.6% in May.
*European stocks closed lower on Tuesday after hot inflation readings reignited concerns about the pace of monetary tightening from central banks.*
*Euro zone inflation hit an annual 8.1% in May, exceeding expectations and marking a seventh consecutive record high. The record annual consumer price increase was driven by soaring energy costs, which hit 39.2% (up from 37.5% in April) and a 7.5% increase in food, alcohol and tobacco prices (up from 6.3%).*
By: via @AlliesFin Serve Stock Market
