Market Performance and Key Factors
On Thursday, the S&P 500 and Nasdaq Composite closed at new all-time highs following better-than-expected employment data.
The Dow Jones Industrial Average rose 0.77% to 44,828.53 points, the S&P 500 increased by 0.83% to 6,279.35 units, and the Nasdaq Composite advanced 1.02% to 20,601.10 units.
Both the S&P 500 and Nasdaq have recorded three new historical highs over the past four trading days.
Market Sentiment and Recent Developments
According to analysts at Actinver, American markets maintained their positive tone from June, driven by renewed optimism surrounding artificial intelligence.
Key factors contributing to this upbeat sentiment include:
- Approval of the US fiscal package for the upcoming year by the House of Representatives
- The US-Vietnam trade agreement
- June employment figures, which reinforced the perception of a resilient labor market showing stability throughout the year
Market participants quickly dismissed the possibility of an interest rate cut in July, with probabilities of a 25 basis points reduction in September sitting at 68%, according to CME Group’s Fedwatch tool, down from 74% the previous week.
Expert Opinions and Market Reactions
“We are witnessing a genuine outburst of irrational exuberance; the stock market is heavily biased towards optimism,” stated Kristina Hooper, Chief Investment Strategist at Man Group.
“However, it has some basis. I believe there is a certain level of relief because the employment report wasn’t as bad as it could have been,” she added.
Market Closure and Recent Milestones
American markets will be closed on Friday for the Independence Day celebration in the United States.
During trading, both the S&P 500 and Nasdaq reached new record highs.
Among the market giants, NVIDIA stood out, temporarily surpassing Apple’s $3.91 trillion market cap.
Key Questions and Answers
- Q: What drove the recent gains in the S&P 500 and Nasdaq?
A: Renewed optimism around artificial intelligence, along with better-than-expected employment data, fueled the rally in both indices.
- Q: What factors contributed to the dismissal of potential interest rate cuts?
A: Market participants deemed it unlikely for a July rate cut and adjusted probabilities of a September reduction to 68% from 74% the previous week.
- Q: How have recent market developments impacted expert opinions?
A: Kristina Hooper, Chief Investment Strategist at Man Group, described the market as experiencing “irrational exuberance,” but acknowledged underlying relief due to less-than-expected employment report figures.
