Wall Street posts strong gains at start, driven by increased confidence in the economy

Wall Street posts strong gains at start, driven by increased confidence in the economy

August 15, 2024 – 11:13

Positive U.S. economic data largely allayed investors’ recession fears ahead of Thursday’s torrent of economic data, and led to a rebound in stocks following last week’s sharp global sell-off.

Reuters

Wall Street gets off to a strong start on Thursday, as investors regained confidence in the economy after encouraging data on consumption and employment helped ease concerns about a recession in the north.

The Dow Jones Industrial Average rose 1.4%. The S&P 500 rose 1.1%, marking its sixth consecutive gain. The Nasdaq Composite soared 1.5%.

Retail sales rose 1% in July, far exceeding the Dow Jones estimate for a 0.3% increase. Weekly jobless claims also declined during the week. The data was a boost for investors and a broader market trying to recover from a slump in August linked to concerns about a slowing economy that arose after the disappointing July jobs report on Aug. 2.

After rising 3% this week, the S&P 500 is now less than 3% below its record. All three major U.S. indexes are now trading above their closing levels from Aug. 2, the session before the Aug. 5 global stock market crash that was largely driven by investor concerns about an economic slowdown and the unwinding of a popular hedge fund’s currency operation.

Wall Street: What the market is analyzing

“More data like this could ease concerns that the economy is tipping toward a recession and take pressure off the Fed to cut rates more aggressively than they would like,” said Chris Larkin, managing director of trading and investment banking at Morgan Stanley’s E-Trade.

Encouraging inflation data this week had largely allayed investors’ recession fears ahead of Thursday’s torrent of economic data, and led to a rebound in stocks after last week’s sharp global sell-off.

wall street markets

After rising 3% this week, the S&P 500 is now less than 3% below its record.

After rising 3% this week, the S&P 500 is now less than 3% below its record.

Reuters

Stocks rose Wednesday after the consumer price index showed a slowing annual inflation rate of 2.9%, the lowest since 2021. That data, along with a key measure of wholesale inflation released Tuesday that rose less than expected, have reassured investors that a soft landing for the economy is back on the table and that the Federal Reserve will likely cut interest rates at the central bank’s September meeting.

Source: Ambito

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