Wall Street Surges On Upbeat Retail Guidance, Easing Fed Fears

The stock market has had a rebound-minded disposition since the start of today’s trading, having been energized by a battery of better-than-expected/better-than-feared earnings reports and guidance from the retail industry, increased Q2 revenue growth guidance from Southwest (LUV), and JetBlue (JBLU), and reports pointing to the prospect of Shanghai ending its lockdowns next week.

In brief, these developments have made market participants feel less pessimistic about the growth outlook than they have been.

At the same time, a strong reversal in shares of NVIDIA (NVDA), which were down as much as 10% after the leading semiconductor company issued disappointing fiscal Q2 revenue guidance, has made market participants feel better about the price action and the idea that the bad news had already been accounted for in prior declines.

That view has carried over to the broader market, which has been under some serious selling pressure since the start of the second quarter. With today’s move, the S&P 500 is back above 4,000; and the major indices are all at their highs for the session.

The primary theme today is that the market feels better — or relieved at least — about the current state of the consumer. An upward revision to the personal spending component of the Q1 GDP report and favorable earnings news from Macy’s (M), Dollar General (DG), Dollar Tree Stores (DLTR), and Williams-Sonoma (WSM) have been the catalysts for the shift in sentiment.

The bulls have capitalized on the shift, driving some short squeezes in beaten-down stocks and embracing buy-the-dip efforts across all sectors, all market cap sizes, and all investment factors.

The 10-yr note yield, which flirted with 2.70% overnight, is back up to 2.78%, up three basis points from yesterday’s settlement. The U.S. Dollar Index is down 0.1% to 101.92. Notably, WTI crude futures are up 3.8% to $114.57/bbl, and gas prices have followed, yet that hasn’t deterred today’s interest in consumer discretionary stocks and stocks in general.