The US stock market surged to new heights on Tuesday, with the Dow Jones Industrial Average reaching a record closing level. This rally was fueled by expectations of potential interest rate cuts by the Federal Reserve in 2024, which could boost the economy and corporate profits. The positive sentiment was further supported by strong earnings reports from major companies like Bank of America and UnitedHealth Group.
The Dow Jones Industrial Average rose 742.76 points, or 1.85%, to 40,954.48, the S&P 500 gained 35.98 points, or 0.64%, at 5,667.2 and the Nasdaq Composite added 36.77 points, or 0.2%, at 18,509.34.
Of the 11 major sectors in the S&P 500, industrials enjoyed the largest percentage gains, while technology and communication services were the only two sectors to end in negative territory.
Economically sensitive small caps extended their rally. The Russell 2000 scored a fifth straight day of gains greater than 1%, its longest winning streak since April 2000. The index gained 3.5%, touching its highest level since January 2022.
Federal Reserve Governor Adriana Kugler’s comments about the possibility of lowering interest rates sooner if the job market cools “too much” added to the optimism on Wall Street. Analysts believe that the current market environment assumes a perfect scenario where the Fed cuts rates while inflation slows down without pushing the economy into a recession. Additionally, rising expectations of a Donald Trump victory in the 2024 US presidential election, which could lead to tax cuts and deregulation, further contributed to the bullish sentiment.
In contrast to the US market, European bourses experienced declines, with German investor confidence falling for the first time in a year. The International Monetary Fund maintained its global growth forecast for this year at 3.2% but trimmed its projections for the United States and Japan while warning of ongoing inflation risks and trade tensions.
Gold prices also reached a new record, jumping 1.9% to $2,450.07 per ounce, driven by shifting expectations regarding the Fed’s monetary policy. In Asia, markets were mixed, with Hong Kong experiencing losses in the tech sector, while other major indices saw modest gains or declines. Traders in China awaited policy measures from the country’s leaders as they held a key economic meeting during the week.
(With inputs from agencies)
The Dow Jones Industrial Average rose 742.76 points, or 1.85%, to 40,954.48, the S&P 500 gained 35.98 points, or 0.64%, at 5,667.2 and the Nasdaq Composite added 36.77 points, or 0.2%, at 18,509.34.
Of the 11 major sectors in the S&P 500, industrials enjoyed the largest percentage gains, while technology and communication services were the only two sectors to end in negative territory.
Economically sensitive small caps extended their rally. The Russell 2000 scored a fifth straight day of gains greater than 1%, its longest winning streak since April 2000. The index gained 3.5%, touching its highest level since January 2022.
Federal Reserve Governor Adriana Kugler’s comments about the possibility of lowering interest rates sooner if the job market cools “too much” added to the optimism on Wall Street. Analysts believe that the current market environment assumes a perfect scenario where the Fed cuts rates while inflation slows down without pushing the economy into a recession. Additionally, rising expectations of a Donald Trump victory in the 2024 US presidential election, which could lead to tax cuts and deregulation, further contributed to the bullish sentiment.
In contrast to the US market, European bourses experienced declines, with German investor confidence falling for the first time in a year. The International Monetary Fund maintained its global growth forecast for this year at 3.2% but trimmed its projections for the United States and Japan while warning of ongoing inflation risks and trade tensions.
Gold prices also reached a new record, jumping 1.9% to $2,450.07 per ounce, driven by shifting expectations regarding the Fed’s monetary policy. In Asia, markets were mixed, with Hong Kong experiencing losses in the tech sector, while other major indices saw modest gains or declines. Traders in China awaited policy measures from the country’s leaders as they held a key economic meeting during the week.
(With inputs from agencies)
