The Green Wave on Wall Street
After a notable jump last week, the stock market is on an upward trajectory, aiming to continue its rally. The S&P 500 and Nasdaq Composite are boasting gains of 10.2% and 11.2%, respectively, in the first quarter of the year. These impressive figures position the S&P index amongst the top performers for the first quarter since as far back as 1945.
At the onset of the year, the sentiment towards stocks was tepid due to high interest rates. The prevailing assumption was that equities might have a lukewarm year. However, the fervent embrace of artificial intelligence technologies by investors has injected a bullish fervor into the market. Several Wall Street banks have already revised their targets for the S&P upward in response to the promising performance of tech stocks.
Leading the charge in stock price surges are chipmakers such as Nvidia and Advanced Micro Devices, witnessing notable growth percentages of 95% and 30% respectively in the first quarter.
Factors Driving Today’s Increase
The recent surge in stocks can also be attributed to positive economic indicators. Notably, durable goods orders spiked by 1.4% in February, fueled predominantly by increased orders for transportation equipment and machinery.
Additionally, investors are looking forward to the release of the February Personal Consumption Expenditures (PCE) report scheduled for this Friday. The Federal Reserve’s key inflation metric is expected to rise by 0.36% month-over-month, nudging the annual inflation rate to 2.47%. This marginal increase from January signals optimism among traders regarding the Fed’s inflation management efforts.
Fed Chair Jerome Powell’s dovish remarks during last week’s policy meeting have further bolstered investor confidence. Powell’s outlook, which includes a projection of three rate cuts this year and assurance in the ongoing disinflation process, has resonated positively with the market.
As of the latest update, the S&P and Nasdaq are experiencing gains of 0.21% and 0.35% respectively today.
