US Stocks End the Month in the Green Despite Rise in Inflation Indicator

Sherif Adel (Washington)
In the last days of the week and the month, US stocks ignored the rise in the Fed’s favorite indicator for measuring inflation, and what it might cause to push the bank to maintain its tightening policies for prolonged periods. Its main indices ended trading in the green zone, and the Dow Jones Industrial Average recorded its best month since last January.
During Friday’s trading, the Dow Jones Industrial Average rose 272 points, representing 0.8% of its value, the S&P 500 rose by the same rate, while the rise in the Nasdaq index did not exceed 0.7%. On the monthly level, all three indices were also in the green, with the Nasdaq jumping 2.5%, the S&P 500 adding 1.5% to its value, and the Nasdaq ending the month slightly higher than where it started.
The data released before the start of official trading on Friday indicated that the core personal consumption expenditures price index, which is the Fed’s preferred indicator for monitoring inflation in America, rose by 0.3% during the month of March. The rise in the index came as a surprise to a large extent to the markets, especially after the Federal Reserve raised its basic interest rates in the last 9 meetings, by a total of 475 basis points, but the released data showed the continuation of high inflation despite its stubbornness, which supported expectations of raising interest again at the meeting. The Bank’s Monetary Policy Committee next Wednesday.
And after the business results for the first quarter of the year, which were announced during the ending week, more than half of the companies listed in the S&P 500 index completed the publication of their data, and at least 80% of them came out better than expectations, despite growing fears that the country might enter a recession in recent months. In addition to the confusion caused by the collapse of more than one American bank during the last months of the quarter.
On Friday, the First Republic Bank share also continued its collapse, after the Federal Reserve, the Treasury Department and the Federal Deposit Insurance Corporation refused to provide it with new exceptional support. And after losing 43% of its value in today’s trading, and despite stopping dealing with it more than once, it seemed clear that the bank was on its way to be the third bank subject to the control of the federal institution, after Silicon Valley and Signature Banks.
The bank lost another 33% of its value, during after-hours transactions on the last days of the week, which are usually characterized by weak volumes and limited price movements, to end the day, week and month at $2.33, and the stock had started trading today at $6.60.
The Federal Deposit Insurance Corporation asked US banks wishing to acquire the bank to submit their offers, hoping to reach a buyer who would exempt the institution from interfering again and depleting its cash.