Summary: US manufacturing and services PMIs for April unexpectedly rose, pushing the composite PMI to an 11-month high and signaling renewed price pressures. Economists warn of a potential rise in CPI. Following the data release, the Dow Jones and S&P 500 turned lower, while some tech stocks rebounded with Amazon gaining over 2% and Tesla slightly recovering from Thursday's nearly 10% drop.
On Friday, S&P Global announced that the US Manufacturing Markit PMI for April unexpectedly returned to above 50, the threshold between expansion and contraction, while the Services PMI did not decrease but instead reached new highs for the past six months and year, respectively. The combined PMI exceeded expectations, hitting its highest level since May of last year. Sub-indexes signaled a resurgence of price pressures, with purchasing prices reaching their highest levels since November and factory prices at their highest since September.
S&P Global's economists warned that the Consumer Price Index (CPI) could rise, or at least remain elevated, reigniting inflation concerns. Following the release of the PMI data, US stocks declined, major US stock indices fell during trading, and US Treasury prices plummeted, causing yields to rise. The US Dollar Index, which had neared a one-year low on Thursday, quickly erased intraday losses and reached a new daily high.
In contrast to the struggling US stocks, European stocks benefited from strong performances by software company SAP and eyewear and optical equipment manufacturer EssilorLuxottica, offsetting the negative impact of declining industrial metals such as copper on mining stocks. Pan-European stock indices erased losses from the previous two days, reaching new highs for the first time in over a year. The French stock index resumed its upward momentum, hitting all-time highs.
In commodities, gold prices fell significantly after recent statements by Federal Reserve officials supporting continued interest rate hikes, closing below the psychological barrier of $2,000 for the first time this month. Industrial metals continued to decline, with copper falling for three consecutive days amid concerns over China's copper import demand, and zinc reaching a five-month low. Oil prices rebounded on Friday, but concerns over the economic outlook put a damper on the month-long rally.
The three major US stock indices barely turned positive during the last trading session, with Tesla rebounding but still falling more than 10% for the week. Technology stocks experienced mixed results, with Apple, Microsoft, Meta, and Netflix all declining, while Amazon and Alphabet rose, with Amazon gaining over 2%.
Overall, popular Chinese concept stocks continued to decline, with the Nasdaq Golden Dragon China Index (HXC) falling more than 1% in early trading. Electric vehicle battery swap company UCAR, which surged 620% on its first day of trading on Thursday, saw its shares drop more than 60% in early trading on Friday. In contrast, newly-listed logistics company JYD experienced a strong debut, with its shares soaring as much as 150% during intraday trading.
US Manufacturing and Services PMI data for April exceeded expectations, providing a boost to the dollar and US stocks. However, inflation concerns and mixed performances from technology stocks tempered gains. European stocks fared better, driven by strong corporate earnings, while commodities experienced declines amid concerns over China's demand and the global economic outlook.
