Nasdaq's Best Monthly Gain in 6 Months, Nvidia Soars 27%

* U.S. Core PCE Rises 2.8% Year-on-Year in April

* Nasdaq Posts Largest Monthly Gain Since November Last Year

* U.S. Oil Records Worst Monthly Performance Since November Last Year

On May 31st, local time, investors digested the latest U.S. inflation report, and U.S. stocks picked up in the late session, ending with mixed results.

As of the close, the Dow Jones Industrial Average rose by 574.84 points, a gain of 1.51%, marking the best single-day performance of the year, closing at 38,686.32; the S&P 500 Index increased by 42.03 points, a gain of 0.80%, reporting 5,277.51; the Nasdaq Composite Index slightly fell by 2.06 points, a decrease of 0.01%, reporting 16,735.01.

Investors took profits in the technology sector, which performed the worst, with Nvidia giving back 0.8%, and Tesla falling 0.4%.

On individual stocks, media cited informed sources revealing that Google carried out a large-scale layoff in its cloud computing department this week, involving about 100 employees. The company stated in a release: "We will continue to invest in key business areas to ensure the company's long-term success." Earlier this month, the tech giant fired at least 200 employees in its core departments as part of its global strategic restructuring.

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Dell Technologies closed down 17.9% for the day. The company reported first-quarter earnings after the market closed on Thursday, with revenue of $22.24 billion and earnings per share of $1.27. Despite both metrics exceeding expectations, the momentum in the artificial intelligence (AI) server business failed to impress investors with high hopes for AI, leading to the stock being sold off.

Chris Zaccarelli, Chief Investment Officer at Independent Advisor Alliance, a financial institution, stated that the most important economic data of the week did not deviate too much from expectations, and the market breathed a sigh of relief after the inflation report was released.

Quincy Krosby, Chief Global Strategist at LPL Financial, expects volatility to continue, stating that the presidential election, U.S. Treasury yields, and consumer spending are all market variables.Summarizing the week, the S&P 500 and the Nasdaq Composite respectively accumulated declines of 0.5% and 1.1%, with both stock indices ending a five-week winning streak. The Dow Jones Industrial Average fell nearly 1.0% during the period, marking two consecutive weeks of decline on a weekly basis.

As May comes to a close, the Dow Jones Industrial Average has accumulated a 2.3% increase, the S&P 500 has risen by 4.8%, marking the best May performance since 2020; the Nasdaq Composite has gained 6.8%, the largest single-month increase since November last year. The strong performance in May is largely attributed to the surge in Nvidia's stock price, which jumped nearly 27% during the month.

Core PCE rises 2.8% year-on-year in April

On May 31st, local time, the U.S. Bureau of Economic Analysis (BEA) announced that the U.S. Personal Consumption Expenditures (PCE) price index for April rose by 2.7% year-on-year, unchanged from the previous value, and increased by 0.3 percentage points month-on-month, with the previous value being 0.3%. The Federal Reserve's most closely watched inflation indicator—core PCE, which excludes food and energy prices—rose by 2.8% year-on-year, also unchanged from the previous value, with the Fed's target being to restore it to 2%; on a month-on-month basis, core PCE increased by 0.2% in April, in line with expectations, with the previous value being 0.3%.

Breaking it down, consumer spending on goods and services rose by 0.2% and 0.3% month-on-month in April, respectively, with energy prices surging by 1.2%. At the same time, personal income growth slowed, with a month-on-month increase of 0.3%, lower than the previous value of 0.5%, and disposable personal income increased by 0.2% month-on-month, with the previous value being 0.5%.

Jerry Chen, a senior analyst at Gain Capital Group, stated in a report sent to First Financial Daily reporters that the above data is in line with expectations, which will further suppress expectations for rate cuts for the whole year. The market's current prediction for the easing magnitude is 25 basis points, with the probability of a rate cut in September being about 50%. "Overall, there is still a certain gap from the 2% target. The Fed's judgment is that inflation is falling slower than expected and higher interest rates need to be maintained for a longer period."

U.S. oil has the worst monthly performance since November last year

In terms of commodities, international oil prices fell on Friday. OPEC+ member countries will hold a meeting this weekend and may extend the current voluntary production cut agreement. WTI crude oil futures fell by 92 cents, a decrease of 1.2%, to $77.99 per barrel, while Brent crude oil futures closed at $81.62 per barrel, down by 24 cents, a decrease of 0.3%. Summarizing May, U.S. oil has accumulated a decline of 6%, the largest single-month drop since November last year, while Brent oil has fallen by 7% during the same period.

Investors digest the latest PCE report, expecting the Fed to still cut rates within the year, and gold prices closed lower. Spot gold fell by 0.7% to $2,325.67 per ounce, and U.S. gold futures fell by 0.9%, to $2,346.40 per ounce. Looking back at May, gold prices have accumulated a 1.8% increase, achieving a monthly rise for four consecutive months, and touched a record high of $2,449.89 per ounce on May 20th.