NASDAQ 100, Dow Jones, S&P 500: Hit Milestones Amid Fed Driven Optimism

Highlights

• Stock market ended the week with gains despite slight Friday downturn.
• Federal Reserve’s decision to maintain rates and favorable inflation data contributed to optimism.
• Tech sector showcased impressive performance, driving overall positive outlook.

Overview

The U.S. stock market is closed on Monday for a holiday although investors are expected to continue to assess the monetary policy path ahead, after a raft of central bank meetings last week.

Wall Street wrapped up an eventful week with a slight downturn on Friday, as investors analyzed central bank meetings and economic data. The stock market’s performance throughout the week showcased notable milestones and provided valuable insights for traders.

Daily and Weekly Index Performances

On Friday, the S&P 500 slipped by 0.37% to close at 4,409.59, while the Dow Jones Industrial Average experienced a 0.32% decline, losing 108.94 points and closing at 34,299.12. The Nasdaq Composite also decreased by 0.68%, finishing the session at 13,689.57. However, despite this slight dip, all three major indices posted gains for the week.

Throughout the week, the S&P 500 delivered its best performance since March, boasting a 2.6% increase. This marked the benchmark’s fifth consecutive positive week, a streak not seen since November 2021. The Nasdaq Composite experienced a strong showing as well, gaining 3.3% for the week and celebrating an eight-week winning streak, the best since 2019. The Dow Jones Industrial Average enjoyed its third consecutive positive week, rising nearly 1.3%.

Market Rally Shows Resilience, Confidence

The stock market rally showcased the resilience and strength of the S&P 500, Nasdaq, and Dow Jones Industrial Average. These indices reached their highest levels since April 2022, indicating the growing confidence of investors in the market’s upward trajectory. The positive performance throughout the week was a result of the Federal Reserve’s decision to maintain unchanged rates and the release of favorable inflation data.

Fed Keeps Rates Unchanged, Optimism

The Federal Reserve fulfilled investors’ desires by keeping rates unchanged, following ten consecutive hikes. Although the Fed hinted at the possibility of two more rate increases this year, many experts believe that the central bank’s tightening cycle may be approaching completion. This news provided a respite for investors and contributed to the overall positive sentiment in the market.

Inflation Hits Two-Year Low

The release of the May consumer price index brought encouraging news, indicating the lowest inflation level in two years. Consumer inflation expectations for June also declined, further easing concerns about rising prices. These positive economic indicators supported the market’s optimistic outlook.

Tech Stocks Soar with Impressive Gains

Notable sector performances included the tech industry, which experienced positive movement. Companies like Adobe, Nvidia, and Microsoft showcased impressive gains. Adobe gained 0.9% after surpassing expectations and providing optimistic guidance. Nvidia advanced 10% for the week, adding to its remarkable surge of 192% this year. Microsoft achieved a 4.7% weekly increase and reached a new record high on Thursday.

Strong Closes Reflect Positive Outlook

Despite Friday’s slight downturn, the stock market had a highly positive week, with the S&P 500, Nasdaq, and Dow Jones Industrial Average all posting gains. The Federal Reserve’s decision to maintain rates and the favorable inflation data contributed to the overall optimism among investors. Tech stocks, in particular, demonstrated robust performance, adding to the market’s positive outlook. As the market continues to navigate the implications of central bank policies and economic data, investors remain hopeful about the endurance of the AI sector and show a preference for U.S. stocks.