Performance of U.S. Stock Indices in 2024: The U.S. financial markets experienced a week full of events and developments that restored momentum to stock indices after a period of decline.
This resurgence was supported by robust economic data,
which renewed investor confidence and drove them back into the market.
Contents
The Return of Indices to an Upward Trend
Renewed Confidence in Wall Street
Decline in Treasury Yields and the Dollar
Reassuring Signals Amid Challenges
Anticipation of Powell’s Speech in Jackson Hole
Interest Rate Cut Expectations
The Return of Indices to an Upward Trend
U.S. stock indices achieved significant gains for the seventh consecutive session,
with the S&P 500 index recording its best performance since October 2022.
This rise comes as traders look forward to Jerome Powell’s speech,
the Federal Reserve Chairman, at Jackson Hole, Wyoming,
hoping he will clarify the outlines of the upcoming monetary policy.
Despite relative success in reducing inflation, the labor market remains a challenge.
The End of the Losing Streak
The stock market ended a four-week losing streak,
fueled by concerns that the Federal Reserve might not reduce borrowing costs quickly enough
to prevent a deeper slowdown in the world’s largest economy.
This week, data showed a decline in inflation and an increase in consumption,
rekindling hopes that the Federal Reserve can achieve a soft landing.
Renewed Confidence in Wall Street
Mark Hackett from “Nationwide” stated that reassuring inflation data boosted investor confidence,
leading to increased market optimism. The S&P 500 index rose to the 5555-point region,
with major companies like “Nvidia” leading the charge.
Meanwhile, Nike’s stock saw its longest rally in over eight years. Conversely,
Applied Materials’ stock fell after disappointing sales forecasts.
Decline in Treasury Yields and the Dollar
Treasury yields for 10-year bonds fell by three basis points to 3.88%.
The dollar declined for the third consecutive week, marking its longest losing streak since March.
Hedge funds have turned optimistic about the Japanese yen for the first time since 2021
The appetite for yen trading was reduced after sharp fluctuations in the foreign exchange markets.
Reassuring Signals Amid Challenges
As U.S. stocks rebounded, the summer sell-off now appears to be a mere pause in the upward market trend
rather than the beginning of its end. Despite the challenges traders faced in predicting the economy’s direction,
some reassuring signals have emerged in the market.
Anticipation of Powell’s Speech in Jackson Hole
All eyes will be on Jerome Powell’s speech on Friday at the Federal Reserve’s economic policy symposium in Jackson Hole.
As the central bank approaches an interest rate cut,
Powell’s remarks will be closely analyzed for hints regarding the
Federal Reserve’s economic outlook following weaker-than-expected job reports and continued inflation decline.
Interest Rate Cut Expectations: 25 or 50 Basis Points?
In the coming weeks, the focus will be on the
Federal Reserve’s decision regarding the size of the interest rate cut,
which could range between 25 and 50 basis points.
Many analysts suggest that the final decision heavily depends on upcoming economic data, particularly the anticipated jobs report.
Conclusion
The past week was filled with events and developments that restored confidence in Wall Street,
driving indices to achieve their best weekly performance in 2024.
Despite ongoing challenges and risks, the markets are moving steadily toward stability,
We are awaiting further clarification from Jerome Powell at Jackson Hole.
Performance of U.S. Stock Indices in 2024
