US Stock Market Update: S&P 500 Hits New High, Nasdaq Tops 16,000, Dow Jones Falls

The S&P 500 index rose by 28.70 points, or 0.57 percent, to 5026.61 points. However, the Dow Jones fell 54.64 points, or 0.14 percent, to 38,671.69. The Nasdaq technology market index rose 196.95 points, or 1.25 percent, to 15,990.66 as it rose above 16,000 for the first time since November 2021 during the day.

For the week as a whole, the S&P 500 rose 1.37 percent. The Dow Jones gained 0.04 percent and the Nasdaq gained 2.31 percent.

“The index has had a dream start to the year, with its value increasing by more than five percent. In the last year, by more than 20 percent and in five years even by almost 85 percent, which is a respectable performance considering the coronavirus year 2020 and the sell-offs in 2022. The long-term average annual performance of the index is around ten percent,” he said about the growth of the index S&P 500 analyst Purple Trading Petr Lajsek.

The Prague Stock Exchange is the strongest in two years

According to him, US stocks benefit from several factors. The main one is the incredible ride of the “big seven”, which includes Apple, Microsoft, Alphabet, Meta, Amazon, Nvidia and Tesla. The positive mood in the markets is also caused by the extreme strength of the American economy. Interest rates in the US should also fall quite significantly this year, which could further support US stocks. “During 2024, the S&P 500 may also surpass other targets. However, it will depend on the economic results of American companies. However, they look positive so far, especially for technology companies we see very healthy growth,” added Lajsek.

Nvidia shares rose to a new record on Friday after Reuters reported that the company is building a new division focused on designing “custom” chips, including advanced artificial intelligence processors. Microsoft, Amazon.com and Alphabet also posted gains.

About two-thirds of the S&P 500 companies have already published their earnings results for the last three months of last year. According to LSEG data, 81 percent of them beat expectations, while the average for the previous four quarters is 76 percent. The data so far also show that the company’s profit for the quarter rose by nine percent, at the beginning of the year analysts expected growth of only 4.7 percent.

The Labor Department said in a revised report on Friday that consumer prices rose less than initially estimated in December compared to the previous month, but core inflation remained slightly higher. The timing of interest rate cuts in the US thus remains uncertain. Strong economic data and comments from some Fed officials in recent days dashed hopes that the Fed would begin cutting interest rates in March. Markets will now be watching the inflation report for January, which will be published next week on Tuesday.

The US dollar weakened slightly against a basket of major world currencies on Friday. However, it posted gains for the entire week, for the fourth week in a row. Traders cut bets on how quickly the Bank of Japan (BOJ) could raise interest rates and how soon the Fed would cut them.

The dollar index, which tracks the dollar’s performance against a basket of six major world currencies, fell 0.1 percent to 104.07 points. The euro gained 0.1 percent to $1.0790 against the dollar. The dollar-yen exchange rate remained almost unchanged at 149.29 JPY. The euro rose 0.1 percent to JPY 161.04 against the yen.

Stock markets have been dominated by artificial intelligence enthusiasm this year. Nvidia is up 240 percent

2024-02-09 21:04:50
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