On Tuesday, the S&P 500 edged closer to its all-time high, adding nearly 0.5%. The Dow Jones gained 126 points, and the Nasdaq 100 rose almost 0.7%, boosted by a 3.4% increase in Tesla's shares. Investors assessed fresh PPI data, while awaiting for April's inflation report due tomorrow. Producer prices surpassed forecasts in April, but the March reading was revised sharply lower. Chair Powell's comments at the Meeting of the Foreign Bankers’ Association did not offer any new clues. “We did not expect this to be a smooth road. But these [PPI readings] were higher than I think anybody expected,” Powell said. “we’ll need to be patient and let restrictive policy do its work.”. Among stocks, Gamestop and AMC continued their impressive rally, surged 59.8% and 31%, respectively. On Holding shares jumped 18.3% following strong earnings. Home Depot edged lower by 0.1% after a revenue miss. Conversely, US-listed shares of Alibaba shed 6% after the company reported an 86% decline in Q4 profit.

The ZEW Indicator of Economic Sentiment for Germany increased to 47.1 in May 2024, the highest since February 2022, from 42.9 in April, and beating forecasts of 46. The current conditions subindex also improved to -72.3 from -79.2, compared to expectations of -75.8. This marks the tenth consecutive month of rising confidence among financial experts, driven by signs of economic recovery in Germany and stronger-than-expected GDP growth in Q1. Additionally, improving economic conditions in the Euro Area and China have contributed to a better outlook. Expectations for domestic consumption, as well as the construction and machinery sectors, have seen substantial increases.

Total consumer debt in the US surged by $184 billion, or 1.1%, from the prior quarter to a fresh high of $17.69 trillion in Q1 2024. Overall borrowing levels are $3.5 trillion above they were at the end of 2019. Mortgage balances shown on consumer credit reports increased by $190 billion during the first quarter of 2024 and stood at $12.44 trillion at the end of March. Credit card balances, which are now at $1.12 trillion outstanding, decreased by $14 billion during the first quarter but remain 13.1% above the level a year ago. Auto loan balances increased by $9 billion, continuing the upward trajectory that has been in place since 2020Q2, and now stand at $1.62 trillion. Other balances, which include retail cards and other consumer loans, decreased by $11 billion. Overall delinquency rates hit 3.2% during the first quarter of 2024, up from 3.1% in the last three months of 2023, but remained below the 4.7% seen at the end of 2019 before the Covid-19 pandemic.

The dollar index fell to 105 on Tuesday as traders digested fresh PPI data and its implications for the Fed's plans. Producer prices rose much more than expected in April, but the March reading was revised sharply lower, which offered investors some relief. Also, Chair Powell's comments at the Meeting of the Foreign Bankers’ Association in Amsterdam did not offer any new clues. “We did not expect this to be a smooth road. But these [PPI readings] were higher than I think anybody expected,” Powell said. “we’ll need to be patient and let restrictive policy do its work.” Traders now await the key CPI reading due tomorrow. The odds for a Fed rate cut initially fell but then returned to roughly the same level as they were before the PPI release, at 65% in September and 78% for November. The dollar was losing mostly against the euro, the Aussie, the Kiwi dollar and the Pound but was strengthening against the yen.

WTI crude futures dropped to $78 per barrel on Tuesday, closing in on their lowest level in one month, as higher-than-expected US producer prices in April, led to concerns about prolonged higher interest rates by the Fed and potential impacts on oil demand. Adding to woes, the latest OPEC report showed that OPEC+ members exceeded their agreed limit by pumping an additional 568,000 barrels per day last month. Despite this, OPEC remains optimistic about global oil demand, projecting a rise of 2.25 million barrels per day in 2024 and 1.85 million barrels per day in 2025. Meanwhile, the market is closely monitoring wildfires in western Canada, which could disrupt the country's oil supply of 3.3 million barrels per day. In the Middle East, Iraq's oil minister has reassured compliance with OPEC+ production cuts, reversing an earlier statement.

The NFIB Small Business Optimism Index in the US rose to 89.7 in April 2024, slightly recovering from a more than 12-year low of 88.5 in March and beating forecasts of 88.1. Although down 3 points from March, inflation remained the primary concern for 22% of owners surveyed, retaining its status as the topmost challenge in their businesses. At the same time, the number of owners planning price hikes decreased by 7 points to a net 26%. Also, net 12% of owners reported planning to create new jobs in the next three months, up 2 points, and 40% reported job openings they could not fill in the current period, up 3 points. Finally, the net percent of owners who expect real sales to be higher improved by 6 points to -12%. “Cost pressures remain the top issue for small business owners, including historically high levels of owners raising compensation to keep and attract employees. Overall, small business owners remain historically very pessimistic", said Bill Dunkelberg, NFIB Chief Economist.