A Violently Flat Market

By Nicholas Jasinski |  Tuesday, May 31 Vol for Naught. Stock indexes fell to end what was a volatile May—even if the monthly statistics alone won't give you that impression. The S&P 500 finished the month up 0.01%, finishing April at 4,131 points then closing May at 4,132. Of course, there were more than a few bumps along the way. The S&P 500 moved 2% or more on eight of the 21 trading days in May. It bottomed out on May 19, down almost 6% on the month and on the verge of a bear market, before clawing back those losses since the start of last week. It fell 0.6% today. The Dow Jones Industrial Average finished May up 0.04%, after a 0.7% decline today. The Nasdaq Composite slipped 0.4% to end the month down 2.1%. The index had larger daily moves on about half of May's trading days than its full-month performance. It's a violently flat market out there. Poor performance by many of the highly valued technology companies has weighed on broader indexes' performance. The S&P 500 is weighted by market capitalization, so more valuable companies have a larger impact on its moves. The equal-weighted S&P 500, in which all 500 stocks have the same influence on the index, actually rose 1% in May. Here are the best and worst performers in the S&P 500 over the past month. Today's declines came as the global benchmark price of oil jumped above $120 a barrel, following news that the European Union will impose an oil embargo on Russia. The move will ban the vast majority of Russian oil imports by the end of this year, excluding oil that arrives via pipeline. Barron's Lina Saigol has more here. Today's rise brings oil prices back toward levels seen in early March, in the immediate aftermath of Russia's invasion of Ukraine. West Texas Intermediate oil settled today at $114.67 a barrel, while Brent crude hit $122.84. That's good news for oil producing companies, but less-than stellar news for the rest of the economy. Higher oil prices feed into inflation, via costs to produce and transport goods. The latest spike may put a damper on recent hopes of peak inflation in the U.S. Consumers spending more on necessities and at the gas pump also means less for discretionary purchases and other consumption. That's demand destruction in the economy, just as the Federal Reserve is tightening monetary policy. Next up on the economy front will be Friday's May jobs numbers. Economists expect to see growth of 317,500 nonfarm payrolls, after a gain of 428,000 in April. The unemployment rate is seen edging down from 3.6% to 3.5%, which would match a half-century low.

 

DJIA: -0.67% to 32,990.12 S&P 500: -0.63% to 4,132.15 Nasdaq: -0.41% to 12,081.39 The Hot Stock: Mosaic +4.7% The Biggest Loser: Illumina -7.2% Best Sector: Consumer Discretionary +0.5% Worst Sector: Materials -1.5%