The Fed took what many considered to be a hawkish tone according to the meeting minutes that were released on Wednesday afternoon. It was revealed that Jerome Powell is also concerned that inflation may be persistent, which would make it harder to justify rate cuts in the near future.

However, other members of the Fed have come out and said that other information shows that inflation may be slowly creeping back toward 2 percent. Specifically, Rapheal Bostic said that this might be the case, and he also said that the economy that emerged after 2020 may not be as sensitive to rate hikes.

Of course, the Fed minutes were not the only major piece of news to come out this week. On Thursday, Flash Manufacturing PMI and Flash Services PMI numbers were made public. The Flash Manufacturing PMI came in at 50.9 percent, which was higher than the projected 50.0. The Flash Services PMI came in at 54.8, which was well above the projected 51.2 and higher than last month’s figure of 51.3.

Thursday also saw the reveal of unemployment claim numbers from the previous week. Over the past seven days, there were 215,000 requests for benefits, which was less than the projected 220,000 requests and less than the 223,000 that were made the week before.

On Friday, two more important pieces of news were released, and they had to do with durable goods orders as well as reports issued by the University of Michigan. Durable goods orders were up .7 percent on a monthly basis compared to an estimated drop of .9 percent. Core durable orders were up .4 percent compared to an estimated increase of .1 percent on a monthly basis.

The University of Michigan’s revised inflation expectation figures showed that Americans thought that the inflation rate would be 3.3 percent a year from now. This was revised downward from 3.5 percent earlier in the month. Consumer sentiment was revised upward to 69.1 percent compared to an expected 67.8 percent.

The S&P 500 closed the week at 5,304, which was a drop of .09 percent during the last five trading days. It would make a high of 5,332 on Thursday morning and a low of 5,263 on Thursday afternoon. Otherwise, the index spent the rest of the week in a tight trading range as it sits near yearly and all-time highs.

The Nasdaq would finish the week at 16,920, which was an increase of 1.09 percent over the past five trading days. It would make a weekly high of 16,945 on Thursday afternoon and a low of 16,694 just before closing that same day. Like the S&P, the Nasdaq otherwise spent the rest of the week meandering in a close range.

Finally, the Dow would finish the week at 39,069, which was a 2.34 percent drop in the past five trading days. The Dow opened at 40,068 on Monday morning and spent the rest of the week in a freefall. It would close near its low of the week, which was 39,058 set late on Friday afternoon.

In international news, Great Britain announced Friday morning that retail sales had dropped 2.3 percent on a monthly basis. On Tuesday, Canada announced that its inflation rate had fallen to 2.6 percent. Also on Tuesday, New Zealand announced that it would hold its key interest rate steady at 5.5 percent.

This upcoming week will feature several news announcements in the United States. On Tuesday, the CB Consumer Confidence Index will be released while GDP and home sales figures will be made public on Thursday. The monthly Core Price Index comes out on Friday, and the Fed will likely be eyeing that number carefully as it tends to be their preferred gauge on inflation. It’s projected that prices went up by .2 percent over the past 30 days.

This past week was an interesting one for traders as a number of important news releases came out. The main event was the release of CPI figures from the month of April, which showed a slight slowdown in the pace of inflation on both a monthly and on an annual basis.

In April, inflation increased by .3 percent, which was lower than the expected .4 percent. On an annual basis, inflation was at 3.4 percent, which was exactly what analysts had predicted. Over the past year, housing prices have been a significant contributor to overall inflation, which slowed over the past month.

Therefore, if housing prices were to stabilize, it could mean that overall inflation could have a better chance of getting back to the Fed’s 2 percent target. At a minimum, the data was enough for Fed Chair Jerome Powell to come out and say that rate hikes were unlikely at this point. Speculation surrounding rate hikes had become more rampant after previous CPI reports and payroll figure releases told a story of an economy that was still hot.

Now, there is some optimism that the Fed might consider a rate cut in September. However, Powell and the rest of the voting members will be under a microscope by then because of the upcoming election. Any decision to change rates may be perceived as favorable to one candidate or the other, but Powell insists that politics will have no influence on the decisions made throughout the year.

Also on Wednesday, it was revealed that retail sales were flat in April. However, it is worth noting that the price producer index (PPI) was up .5 percent over that same time period. Therefore, it might mean that consumers are becoming less interested in paying the higher prices companies and service providers are passing on to them.

On Thursday, it was revealed that 222,000 people applied for unemployment benefits over the past week. This was lower than the 232,000 who applied last week but higher than the 219,000 who were projected to have filed.

The S&P 500 finished the week up 1.4 percent to close at 5,303. It would make a weekly high of 5,324 on Thursday afternoon and would make its low of the week on Tuesday when it dipped to 5,222.

The Dow would top 40,000 for the first time ever this week and would close at 40,003 after hitting a weekly high of 40,044 on Thursday afternoon. The weekly low was 39,386 established on Tuesday morning. The closing price represented a gain of .87 percent for the week for an index that is up 19.7 percent over the past 12 months.

Finally, the Nasdaq would join the other two major indexes in the black finishing up 1.97 percent to close at 16,685. The weekly high was established on Thursday when the market hit 16,789 while the weekly low was hit on Monday morning when the market opened the week at 16,356.

In international news, New Zealand reported on Sunday night that inflation expectations for the nation dropped from 2.5 percent to 2.33 percent. On Tuesday evening, Australia reported that its wage price index dropped to .8 percent for the previous quarter compared to 1 percent for the last quarter of 2023. Also on Tuesday, Great Britain announced that 8,900 additional adults filed for unemployment benefits in the month of April.

Next week is the final full trading week of May as the following Monday is the Memorial Day holiday. It will be relatively light on news in the United States aside from a Sunday speech from Jerome Powell and revised consumer sentiment and inflation expectations from the University of Michigan coming out on Friday. The Flash Manufacturing PMI and Flash Services PMI comes out Thursday morning in the United States, and those same surveys will be released throughout Europe during their Thursday session as well.