Market Recap - Mixed Week Ends On A Positive Note

Equity indices finished the week mixed, with the S&P 500 and the Dow losing 0.2% apiece and the tech-heavy Nasdaq adding 1.3%. Investors digested the latest policy directive from the Fed, the Employment Situation report for April, and another big batch of corporate earnings -- including Apple's (AAPL) quarterly report.

The stock market kicked off the week on a lower note Monday, with telecoms leading the retreat after Sprint (S) and T-Mobile US (TMUS) agreed to an all-stock merger over the weekend. The deal, which capped four years of on-again, off-again talks, is aimed at creating a larger carrier to better compete with wireless giants AT&T (T) and Verizon (VZ).

Wall Street bounced back a bit on Tuesday, led by technology shares, which rallied ahead of Apple's quarterly earnings release. Apple's results crossed the wires on Tuesday evening, showing a better-than-expected bottom line. In addition, the tech giant raised its profit guidance for the current quarter, increased its share repurchase program by $100 billion, and raised its dividend by 16%.

Apple shares rallied more than 4.0% on Wednesday in reaction to the upbeat results/guidance, but the broader market struggled -- a somewhat concerning signal considering Apple was among the top performers during last year's rally and considering it's the largest component in the S&P 500 by market cap.

The Fed's latest policy directive was released on Wednesday afternoon, but contained few surprises. Fed officials unanimously decided to leave the federal funds target range unchanged at 1.50% to 1.75%, as expected. In addition, officials laid the groundwork for a rate hike at the June meeting and left the door open for another one to two hikes before the end of the year.

Equity indices shot lower at the start of Thursday's session, with the S&P 500 busting through its 200-day moving average, but eventually rebounded to finish little changed. Tesla (TSLA) received a lot of attention in the media on Thursday after its CEO, Elon Musk, unconventionally dismissed analysts' questions in the company's earnings call, calling them "boring."

The Employment Situation report for April crossed the wires on Friday morning, showing a lower-than-expected increase in nonfarm payrolls (164K actual vs 190K Briefing.com consensus), an in-line reading for average hourly earnings (+0.2% actual/Briefing.com consensus), and a lower-than-expected unemployment rate (3.9% actual vs 4.0% Briefing.com consensus).

The key takeaway from the report is that there weren't a lot of big surprises in it, which effectively means the Fed is apt to stay on course for at least two more rate hikes this year.

Apple reemerged in the headlines on Friday after Warren Buffet revealed his company, Berkshire Hathaway (BRK.B), bought an additional 75 million shares of Apple in the first quarter. Apple jumped 3.9% in reaction, leading a broad-based rally that made a significant dent in the S&P 500's weekly decline. The tech group was the top-performing sector on Friday, extending its weekly gain to 3.2%.

The technology sector closed at the top of the sector standings by a decent margin, while health care (-3.0%), telecom services (-4.6%), and consumer staples (-2.0%) finished at the back of the pack. In total, seven S&P 500 sectors settled the week in negative territory, while four groups settled in the green.

Market Recap - Buyers Re-Emerge Following Q1 Earnings Season

Buyers returned to the market this week following a three-week absence during the thick of the first quarter earnings season. The S&P 500, the Dow, and the Nasdaq finished with sizable weekly gains, adding between 2.3% and 2.7% apiece -- enough to put the S&P 500 and the Dow back into positive territory for the year (+2.0%, +0.5% YTD). The Nasdaq is now up 7.2% year-to-date.

The stock market got off to a slow start this week as investors digested President Trump's decision to pull the U.S. out of the Iran nuclear agreement and restore the "highest level of economic sanctions" against Iran. The president was scolded by European allies, which wanted the U.S. to remain in the agreement, while Iran's response was more violent with lawmakers burning the American flag in parliament.

Tensions in Middle East were further escalated later in the week when Israel struck nearly all of Iran's military infrastructure in Syria in response to an Iranian missile attack on Israeli-held territory.

Outside of a brief pause, stocks had a mostly muted reaction to the headlines, but crude oil futures took off, with WTI crude establishing a new three-and-a-half year high ($71.26/bbl), as the restoration of U.S. sanctions on Iran -- which is OPEC's third-largest oil exporter -- and the looming threat of conflict within the oil-rich region prompted investors to bet on a disruption to crude supply on the global market.

The S&P's energy sector benefited from the rise in oil prices, adding 3.8% this week, but the industrials, technology, and financials sectors finished with similar weekly gains, adding between 3.4% and 3.6%. In total, nine sectors finished the week in the green, while two -- consumer staples (-0.5%) and utilities (-2.3%) -- finished in the red.

Stocks started taking off on Wednesday and carried that momentum into Thursday's session; the S&P 500 added 1.9% in those two days alone, catapulting above its 50-day moving average to a nearly two-month high. Technology shares rallied over that two-day stretch, reminiscing last year's tech-charged surge, with Apple (AAPL) extending its streak of record closes to five in a row on Thursday (the streak was then broken with a small loss on Friday).

Investors received some important inflation data on Thursday -- namely, the Consumer Price Index for April -- which helped further fuel the bullish bias, coming in slightly below estimates (+0.2% actual vs +0.3% Briefing.com consensus), and thereby tempering concerns that the Fed might have to be more aggressive in its path to normalization.

Overseas, the Bank of England voted 7-2 in favor of keeping its official bank rate and its asset purchase program unchanged on Thursday, but BoE Governor Mike Carney added that interest rates will likely go up by the end of the year. Separately, President Trump announced that his summit with North Korean Leader Kim Jong Un will be held on June 12 in Singapore, a positive stride in the quest for global peace.

The stock market ended the week with a flat performance on Friday. Volatility picked up temporarily in the afternoon when President Trump released a blueprint for lowering drug prices, but order was restored after it became clear that the blueprint still lacked many specific details.