Background on Key Figures and Context
The US stock market has once again reached new heights, driven by anticipation of lower interest rates, the robust performance of technology stocks, and a resilient economy. The Federal Reserve’s decision to cut its interest rate and signal further adjustments before the year ends has provided a boost to markets.
Jerome Powell, the Federal Reserve Chair, has cautioned that risks remain, including persistently high inflation and a slowing labor market. Despite these concerns, the market has responded positively to the more accommodative monetary policy.
Market Performance
- Dow Jones: Increased by 0.27% to 46,142.24 points
- S&P 500: Rose by 0.48% to 6,631.95 points
- Nasdaq Composite: Gained 0.94% to 22,470.73 points
The Dow Jones extended its gains to two consecutive days, while the Nasdaq recorded its eighth upward session in the last nine trading days, ending a two-day losing streak for the S&P 500.
Nasdaq’s Leading Performance
The Nasdaq index led the gains, benefiting from NVIDIA’s announcement to invest $5 billion in Intel. The Russell 2000 small-cap index also touched an intraday high of 2,466 points for the first time since November, as these companies are expected to perform better in a low-interest-rate environment.
Future Market Outlook
US stock futures rose slightly on Thursday night following the record-closing performance of Wall Street indices.
- S&P 500 Futures: Increased by 0.2% to 6,704.75 points
- Nasdaq 100 Futures: Rose by 0.2% to 24,747.75 points
- Dow Jones Futures: Also went up by 0.2% to 46,601.0 points
Mexican Stock Market Performance
The Mexican stock market fell for the second consecutive day, as investors shifted their focus to the US market where technology stocks led the gains.
- S&P/BMV IPC: Declined by 0.44% to 61,323.95 points
- FTSE-BIVA: Dropped by 0.54% to 1,228.99 points
Despite the recent decline, the S&P/BMV IPC has accumulated a gain of over 23% in three months, outperforming the near-18% return of Brazil’s Ibovespa and China’s Shanghai Composite’s 11% gain. The Dow Jones is up by 3.59%, the Nasdaq has gained 14.49%, and the S&P 500 is up by 9.79%.
Key Questions and Answers
- Q: Who is Jerome Powell? A: Jerome Powell is the Chair of the Federal Reserve, the central banking system of the United States.
- Q: Why are lower interest rates beneficial for the stock market? A: Lower interest rates generally make borrowing cheaper, encouraging businesses to invest and consumers to spend, which can boost corporate profits and stock prices.
- Q: What is the significance of the Nasdaq’s performance? A: The Nasdaq Composite Index is heavily weighted towards technology stocks, so its performance reflects the health and growth of the tech sector.
- Q: How does the Mexican stock market’s performance relate to the US market? A: Investors often shift their capital between markets based on perceived opportunities. In this case, the US tech sector’s strength attracted investment away from the Mexican market.
