Stocks on Wall Street experienced a boost as the Dow achieved another record-breaking closing high on Friday. Tesla and Amazon saw gains following upbeat U.S. economic data, which has increased the likelihood of a slight interest rate cut by the Federal Reserve in September.
Consumer spending in the United States saw a robust increase in July, indicating a resilient economy despite a moderate rise in prices.
According to Cameron Dawson, the chief investment officer at Newedge Wealth, investors are observing yet another indication of entering a smooth transition phase. “It’s yet another report that perfectly balances and navigates through the details, just like the story of Goldilocks finding the right fit.” The market is finally receiving precisely what it desires.
An ideal Goldilocks economy experiences consistent growth without reaching levels that would lead to excessive inflation.
What’s the Status of the Underlying Stocks?
Shares of Amazon.com (NASDAQ:AMZN) and Tesla surged more than 3%.
Broadcom (NASDAQ:AVGO) experienced a strong rally of nearly 4%, while Marvell (NASDAQ:MRVL) Technology saw a significant surge of 9% following the chipmaker’s optimistic forecast for quarterly results that exceeded expectations.
The personal consumption expenditures report was released on Friday following remarks from Fed Chair Jerome Powell last week, indicating his endorsement of an upcoming policy change.
Upcoming economic data for the following week includes the release of the August jobs report by the Labor Department, scheduled for Friday.
According to the FedWatch Tool used by CME Group, money markets suggest that traders are mostly anticipating a reduction in interest rates by 25 basis points by the Federal Reserve in September. Considering that the data from Friday was made public, the chance of a decrease of fifty basis points has fallen even further.
There were indications of a dramatic slowdown in the labor market in early August, which generated fears over the possibility of a recession in the United States. Friday marked the completion of a difficult month on Wall Street, which was spurred by these signals. The impact of the Japanese yen brought about a further deterioration of the market carry trade.
Since then, the stock market has seen a robust rebound, as evidenced by the fact that the S & P 500 is presently trading at levels that are near to its all-time highs.
Before the Labor Day vacation, there was a total of 11.2 billion shares moved on U.S. exchanges, which indicates that trading activity was relatively modest during the period. When compared to the average of 11.4 billion shares traded throughout the previous 20 sessions, this is lower.
Dynamics of Indices
The S&P 500 rose by 1.01% and closed at 5,648.40 points.
The Nasdaq Composite Index surged by 1.13% to reach 17,713.62 points, while the Dow Jones Industrial Average experienced a modest increase of 0.55% to reach 41,563.08 points.
All 11 S&P 500 sector indexes experienced gains, with consumer discretionary leading the way with a 1.9% increase, closely followed by a 1.1% gain in industrials.
During the month, the S&P 500 experienced a 2.3% increase, the Dow saw a 1.8% gain, and the Nasdaq rose by 0.6%.
Nvidia (NASDAQ:NVDA) experienced a 1.5% increase, recovering from a 6.4% decline on Thursday. This came after the leading artificial intelligence chip company fell short of highly high investor expectations despite delivering positive results and a forecast that was generally in line with expectations.
Novavax (NASDAQ:NVAX) experienced a significant 8.6% surge following the U.S. Food and Drug Administration’s approval of an enhanced iteration of its COVID vaccine under emergency use authorization.
Ulta Beauty (NASDAQ:ULTA) experienced a 4% decline as it adjusted its annual results projections, attributing it to a decrease in the demand for more expensive cosmetics and fragrances at its retail locations.
Shares of Intel (NASDAQ:INTC) surged nearly 10% in response to news that the company was considering various possibilities, including the potential for a merger.
Dell Technologies (NYSE:DELL), another stock related to artificial intelligence, saw a 4.3% increase in its share price following an upward revision of its annual revenue and profit forecasts.
The stock price of Trump Media & Technology Group, which is primarily owned by former U.S. President Donald Trump, experienced a decline of 1.7%, reaching an all-time low. As a result, the company’s market value now stands at $3.9 billion.
The number of advancing issues in the S&P 500 outweighed the number of falling ones by a ratio of 6.6 to 1.
The S&P 500 achieved an impressive 79 fresh peaks and encountered only two instances of decline, while the Nasdaq celebrated 84 new highs and experienced 77 situations of decrease.
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