Fed Fatigue Eases Amid Earnings-Heavy Week

Traders had a lot to grapple with this past trading week, from earnings, an interest rate decision, and the latest jobs data. Wall Street kicked off the week with solid wins across the board, while its "fear gauge," the Cboe Volatility (VIX) fell to its lowest mark since early April. The Dow Jones Industrial Average (DJI), S&P 500 Index (SPX), and Nasdaq Composite (IXIC) ended April on a sour note, however, turning in their first monthly loss of 2024 following a red-hot employment cost index reading.

Stocks were choppy towards the middle of the week, even after the economy added more jobs than analysts anticipated. Federal Reserve Chairman Jerome Powell all but ruled out another interest rate hike and the central bank kept rates steady, though. A softer-than-expected nonfarm payrolls report boosted all three indexes on Friday, setting the Dow, S&P 500, and Nasdaq all on track for weekly wins.

Long Line at the Earnings Confessional

There was no shortage of earnings reports to parse through this week. Starting off with the bad, blue-chip McDonald's (MCD) recorded its first quarterly earnings miss in about two years. Starbucks (SBUX), meanwhile, logged its worst session in roughly four years, and CVS Health (CVS) eyed its worst day since 2009 after dismal reports. DoorDash (DASH) plummeted after issuing a weak profit forecast, and SoFi Technologies (SOFI) brushed off upbeat results.

As far as winners, Pinterest (PINS) stock bounced after the social media company beat estimates, Carvana (CVNA) recorded a big beat-and-raise, and Block (SQ) topped expectations and leaned into Bitcoin (BTC). Eli Lilly (LLY) and Intel (INTC) also enjoyed post-earnings tailwinds, 

Honorable Mentions

While this week's focus was undeniably on earnings, some stocks made headlines for different reasons. Options bulls blasted Tesla (TSLA) after China reportedly cleared the way for a rollout of its full self-driving (FSD) technology. Elsewhere, streaming stock Paramount Global (PARA) popped amid buyout talks. It's probably a good idea to avoid Tapestry (TPR) in May, while seemingly bulletproof Nvidia (NVDA) is among the best names to own. 

More Fed Commentary, Earnings on Deck

Next week will feature consumer credit and sentiment data, a federal budget update, and remarks from Fed officials. The earnings confessional will still be plenty busy, with reports from Airbnb (ABNB), Foot Locker (FL) Lucid Group (LCID), Palantir Technologies (PLTR), Uber Technologies (UBER), Walt Disney (DIS), and Warner Bros. Discovery (WBD). Slow down before heed the 'sell in May and go away' investing adage, as the popular saying doesn't always apply to election years. And as always, consider these SPX support and resistance levels going forward, identified by Schaeffer's Senior V.P. of Research Todd Salamone.