Monday, Wall Street made a spectacular opening for the week with all three U. S. stock indices, the Dow, S&P 500 and Nasdaq Composite, marking new record highs. The market upswing was mainly due to the upbeat mood over a possible U. S.-China trade truce and later, even more, the Federal Reserve’s rate cut expectations.
Main Stock Indices Broke Records
As the bell rang to signal the start of trading:
Dow Jones Industrial Average gained 315.67 points (+0.67%) to 47,530.09
S&P 500 was up 63.83 points (+0.92%) to 6,856.09
Nasdaq Composite skyrocketed by 335.24 points (+1.45%) to 23,544.00
The upturn followed the news that Washington and Beijing were close to an interim deal that would, among other things, reduce the strain on global supply chains and consequently, investors’ trust would be restored.
What Drives the Market
The analysts pointed out that the market looked brighter thanks to a concoction of slight inflation data, outstanding corporations’ profits, and more favorable trade relations. The tech, consumer discretionary, and industrial stocks — the three sectors most impacted by trade and interest rate scenario — outperformed.
“Markets are pricing in a soft landing scenario,” said Lindsey Piegza, Chief Economist at Stifel Financial. “If the Fed stays on course with gradual rate cuts and trade tensions continue to ease, this rally could extend through year-end.”
Important Events to Follow
Two major developments are sparking investors’ interest this week:
Federal Reserve Meeting (Oct 29): The Fed is generally expected to cut rates by 25 basis points in order to support economic growth and maintain inflation under control.
Big Tech Earnings: Companies such as Apple, Microsoft, and Alphabet are going to unveil their Q3 results, which could have an impact on the overall market direction.
Goldman Sachs forecasts that the momentum in Wall Street will continue while the economic indicators are stable and the world trade relations are getting better.
