Archer Aviation’s shares surged nearly 5% in after-hours trading following the company’s quarterly report, which exceeded market expectations. The stock market is at record highs, powering a record increase. The Dow Jones Industrial Average soared more than 1,100 points, and the S&P 500 index rose by more than 3%. Moreover, now all investors are looking at inflation reports coming down the pipe that would impact the trend even more.
Though a quarterly report that came in better than expected performance from Archer Aviation was enough to wash a bit of the worry off investors’ faces. Whatever the merits of the positive results, they helped to add to the favorable wave of momentum sweeping through the stock market. In fact, because of this the S&P 500 has been able to bring its year-to-date losses down to only -0.6%.
A major sticking point for the markets is the inflation data coming due later this week. Analysts expect that the core inflation rate will be unchanged. It is going to be capped at a 2.8% annualized rate, which was the case last month too. According to the Dow Jones consensus, the consumer price index (CPI) is expected to remain flat at an annualized 2.4% in April. This annualized rate is calculated on a year over year basis.
Brent Schutte, a prominent analyst, commented on the upcoming data, stating, “We will be digging into the data to see if [March’s] slower pace continued or if reports of higher costs for some businesses, which have been reported in recent survey data, have translated to higher prices for consumers.”
The United States and China took a giant step forward in their bilateral relationship. They tentatively agreed to roll back some of their highest tariffs over a 90-day period. This decision would be an attempt to reduce those trade tensions between the two countries. The agreement will reduce reciprocal tariffs to 10%. The U.S. won’t change its current 20% tariffs on Chinese imports linked to the production of fentanyl. Since he took office, the total tariffs on China are now at 30%.
The tariff reductions are scheduled to go into effect just before the start of trading on May 19. This regulatory shift would go a long way to enhance overall market sentiment. This announcement has further fueled investor optimism as they anticipate how these changes will impact various sectors within the economy.
In addition to Archer Aviation’s success and the tariff agreement, Capital One Financial is moving forward with its acquisition of Discover, signaling ongoing consolidation within the financial services sector.
As the financial landscape changes, stakeholders will need to stay focused on federal corporate performances and broader economic indicators. Lastly, positive corporate earnings are rolling in ahead of strong expectations. At the same time, expected changes in inflation may set off more market activity over the next few weeks.
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