In early Thursday trading, major indices in the United States, including the Dow, S&P 500, and NASDAQ, opened on a positive note, reflecting confidence in the stock markets. The S&P 500 briefly reached its highest levels in three weeks, while the NASDAQ Composite also saw an upward trend.
This positive start indicates that traders and investors are no longer as concerned about the recent banking sector crisis, and they are hopeful that the latest US economic data will convince the Federal Reserve to lower interest rates.
As of now, the NASDAQ Composite Index is trading at 11,984.69 (+0.49%), while the Dow Jones Industrial Average Index is trading at 32,702.65 (-0.046%), and the S&P 500 is trading at 4,042.18 (+0.36%).
On Wednesday, the Dow Jones Industrial Average increased by 1% and closed at 32,718, its highest level since March 8 when the California Silicon Valley Bank’s announcement about raising additional capital sparked concerns about a liquidity crisis in the bank.
Stock market analysts attribute the recent uptrend in the stock market to the consecutive release of positive economic data, which indicates that the monetary policies of the US Federal Reserve are effective. Moreover, the diminishing worries about a banking collapse are also contributing to the market’s upward movement without much resistance.
On Wednesday, the S&P 500’s strong performance provided an additional boost to other stocks and indices. This index tracks the performance of the top 500 publicly traded companies in the US, and it closed above the significant 4,000 level on Wednesday.
According to a note to clients from Katie Stockton, a technical analyst at Fairlead Strategies, if the S&P 500 can break out above 4,050, it may propel the index back to its highest levels of the year, which were achieved in early February.
In the last few months of 2022, the US economy expanded by 2.6%, which is slightly lower than the previous estimate of 2.7% GDP growth. The Bureau of Economic Analysis released GDP statistics, indicating that weaker exports and reduced consumer spending were the main contributing factors to the 2.6% GDP growth rate.
Personal consumption expenditures index
Furthermore, the personal consumption expenditures index for February 2023 will be released on Friday. This index holds great significance for the US Federal Reserve as it helps the central bank measure consumer price inflation. The data will assist the US Federal Reserve in analyzing the impact of its interest rate hikes on inflation.