Wall Street experienced a successful week that gained momentum on Thursday, as the latest evidence indicated that inflation is loosening its grip on the economy(source: AP).
- The S&P 500 reached its highest close of 2023, rising by 37 points or 0.8%, reaching 4,510 (source: CNBC).
- The Dow rose by 47 points or 0.1%, reaching 34,395.
- The Nasdaq had its highest close of the year, rising by 219 points or 1.5%, reaching 14,138.
The stock market gained further strength due to recent data, which raised hopes that inflation is cooling down enough for the Federal Reserve to potentially end their series of interest rate hikes soon. Inflation at the wholesale level in June slowed down more than expected, with prices paid by producers only rising by 0.1% compared to the previous year. Traders are starting to believe that the Federal Reserve will increase the federal funds rate to its highest level since 2001 at their next meeting in two weeks. However, the recent inflation data has also convinced some traders that this could be the final rate increase for this cycle.
Several companies contributed to the positive performance of the S&P 500. Amazon saw a 2.7% increase after a successful Prime Day, Alphabet rose by 4.5% following the announcement of their AI tool called Bard, and Nvidia, a key player in the AI market, experienced a 4.2% increase. PepsiCo also added 2.3% after surpassing analysts’ profit expectations for the spring. With the earnings reporting season just starting, JPMorgan Chase and several other banks will provide insight into their spring earnings on Friday.
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