US Market tumbles as inflation woes weigh

US stock market slid deeply in negative territory from record levels on Thursday, 23 May 2024, as reignited concerns over the path of interest rates dominated investor sentiment.

Market witnessed selloff mostly across the board amid investors declining hopes for a September interest rate cut from the Federal Reserve (Fed) after Manufacturing PMI increased from 50.0 in April to 50.9 in May, while Services PMI grew from 51.3 to 54.8. The strength of the services sector indicates that Fed may be forced to keep rates at high levels for longer to fight inflation.

At closing bell, the Dow Jones Industrial Average index declined 605.78 points, or 1.53%, to 39,065.26. The S&P500 index dropped 39.17 points, or 0.74%, to 5,267.84. The tech-heavy Nasdaq Composite index decreased by 65.51 points, or 0.39%, to 16,736.03.

Total 10 of 11 S&P500 sectors closed lower, with real estate sector being worst performer, falling 2.16%, while information technology sector was top performer, rising 0.56%.

Nvidia shares surged 9.3% to close above the $1,000 per share mark for the first time, after the chipmaker posted stronger-than-expected fiscal first-quarter results and announcing a 10-for-1 stock split. The company gave fiscal second-quarter revenue guidance of about $28 billion.

ECONOMIC NEWS: The S&P Global Purchasing Managers Index (PMI) for May came in at 54.4 versus 51.3 last month. The flash reading showed business activity accelerated at the fastest pace in two years despite the Fed's efforts to quell price pressures.

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