Heavy technology Nasdaq It led all three major U.S. stock indexes to a higher close, helped by Nvidia, Microsoft and Alphabet.
The S&P 500 and Nasdaq extended their winning streak to eight consecutive sessions, the longest in 2024, as stocks continued to recover from a sharp sell-off two weeks ago driven by fears of recession.
The rally builds on the biggest weekly gains of the year for the U.S. stock market, with the three major indexes up between 2.9% and 5.3%.
Recent data has shown consumer resilience despite the economic slowdown, raising expectations that the Federal Reserve will begin to taper interest rates At its September policy meeting, the Fed cut its target federal funds rate by 25 basis points. “What’s behind (this rally) is hope that the valves will remain open and that the Fed could cut rates in September,” said Paul Nolte, a wealth adviser and market strategist at Murphy & Sylvest in Elmhurst, Illinois. “Money is looking for somewhere to go, and it’s going into equity markets.” A slim majority of economists polled by Reuters say the Fed will implement three 25-basis-point rate cuts by the end of the year, and that the economy will likely be able to avoid recession as inflation eases.
The Jackson Hole Economic Symposium begins Thursday, and Federal Reserve Chairman Jerome Powell’s comments on Friday will be scrutinized for clues about the U.S. central bank’s path from tight to neutral monetary policy.
“I think he’ll reiterate some of the talking points that the Fed made, which is that they’re getting a little bit more comfortable with the fact that inflation is coming down toward target,” Nolte added. “They’re comfortable that the economy is performing reasonably well, and that will be interpreted by markets as an open door for a rate cut in September.”
The Democratic National Convention in Chicago, which begins Monday, could fuel market volatility that is already heightened by low late-summer trading volume.
The CBOE Market Volatility Index, a gauge of investor anxiety, retreated at a record pace last week from a four-year high amid growing optimism of a soft landing.
Goldman Sachs lowered the odds of a US recession in the next 12 months to 20% from 25% following the latest weekly reports on jobless claims and retail sales.
The Dow Jones Industrial Average rose 236.77 points, or 0.58%, to 40,896.53. The S&P 500 gained 54 points, or 0.97%, to 5,608.25 and the Nasdaq Composite added 245.05 points, or 1.39%, to 17,876.77.
All 11 major S&P 500 indexes closed higher, with communication services enjoying the largest percentage gain.
Advanced Micro Devices rose 4.5% after the chipmaker said it plans to acquire server maker ZT Systems for $4.9 billion to expand its artificial intelligence portfolio and better compete with Nvidia.
B. Riley Financial fell 5.8%, extending a more than 65% drop last week. Co-founder and co-chief executive Bryant Riley had offered to buy the bank on Friday after it warned of a hit to its investment in Franchise Group, which owns Vitamin Shoppe.
Quarterly results from cybersecurity firm Palo Alto Networks, retailer Target and home improvement chain Lowe’s are due later this week.
On the New York Stock Exchange, rising stocks outnumbered falling stocks by a ratio of 3.54 to 1; on the Nasdaq, a ratio of 2.71 to 1 favored advancers.
The S&P 500 posted 32 new 52-week highs and no new lows; the Nasdaq Composite posted 105 new highs and 65 new lows.
Volume on U.S. exchanges was 10.3 billion shares, compared with the 12.24 billion average for the full session over the past 20 trading days.
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.