S&P500 and Nasdaq 100 are rising this year

Demand continued to dominate U.S. stock markets on Tuesday, thanks to lower-than-expected inflation data for April and continued optimism after a temporary suspension of U.S.-China tariffs. The de-escalation of the conflict between the world's largest economies prompted Goldman Sachs to raise its forecast for S&P 500 earnings per share and the index's year-end value to 6,100 points. The investment bank also raised its forecast for U.S. economic growth and lowered the likelihood of a U.S. recession. After news of lower-than-expected inflation in April, the market priced in two interest rate cuts this year and a resumption of monetary policy easing from September. Investors are waiting for Thursday, when the Fed chairman is scheduled to speak at a conference in Washington.

The persistent risk-on sentiment caused further demand for shares of technology companies. Coinbase Global (24%) stood out, whose rapid increase in value resulted from the inclusion of the owner of the cryptocurrency exchange in the S&P500 on May 19. Technological blue chips from the "magnificent seven" were clearly gaining in price for another day. The fastest growth was recorded by Nvidia (5.6%), whose CEO announced on Tuesday the sale of 18,000 state-of-the-art AI chips to Saudi Arabia, where a data center will be built. AMD (4.0%) is also to supply its chips to that country. The Donald Trump administration has changed its approach to semiconductor companies and instead of prohibiting them from exporting modern chips, it is using them as a bargaining chip. Therefore, since this change was announced last week, the PHLX Semiconductor index of semiconductor companies has increased by 14% for five consecutive sessions. It ended Tuesday's session with a 3.15% increase.

Although the S&P 500 ended the session higher, 52% of companies in the index were falling at closing. Demand was strong in 6 of its 11 main segments. The strongest growth was in IT (2.25%), consumer discretionary (1.4%), and energy (1.3%). The biggest declines were in consumer discretionary (-1.2%), real estate (-1.3%), and healthcare (-3.0%).

In the Dow Jones Industrial Average, 15 companies rose in price and the same number fell in price. The significant drop in the index was caused by the devaluation of shares of UnitedHealth Group (-17.8%). The health insurance giant scared investors by suspending its annual results forecast and the resignation of its CEO "for personal reasons". The fastest-growing company in the index was Nvidia (5.6%).

The prices of 52% of the nearly 3.3 thousand companies included in the Nasdaq Composite rose. In the narrower Nasdaq 100, which gained 1.6% on Tuesday and began to grow this year, 62 companies gained. The index of the "magnificent seven" went up by 2.2%. In the next four growing sessions, it increased its value by 10%. On Tuesday, apart from Nvidia (5.6%), Tesla (4.9%) and Meta Platforms (2.6%) gained significantly in price, and only Microsoft (-0.03%) recorded a symbolic drop in price at the close.