The stock market wrapped up an impressive quarter on a high note amid speculation that the Federal Reserve’s policies will ensure a smooth transition, sustaining Corporate America’s momentum.
Wall Street saw the S&P 500 hitting its 22nd record high this year, buoyed by encouraging economic indicators, which overshadowed recent comments from Federal Reserve officials suggesting no immediate rate cuts.
The remarkable $4 trillion surge in U.S. equity values over the past three months has surprised skeptics and prompted strategists to revise their 2024 forecasts.
Lori Calvasina, from RBC Capital Markets, noted, “We think the market’s view of where economic fundamentals are heading, rather than any one economist’s or strategist’s view, is what ultimately drives stock market pricing.”
Stocks saw modest gains after a day of mixed trading, with investors analyzing Fed Governor Christopher Waller’s remarks, emphasizing the need for “at least a couple months of better inflation data” before considering rate adjustments.
Traders also exercised caution ahead of the release of the Fed’s preferred inflation gauge and Jerome Powell’s comments on Friday, given that markets will be closed.
The S&P 500 surged past the 5,250 mark, ending the quarter with a robust rally of over 10%. Such consecutive double-digit gains have been observed only five times since 1950, as per Bloomberg data.
In a shortened trading session before the holiday, two-year yields, which are more responsive to imminent Fed actions, rose by five basis points to 4.62%. Meanwhile, the dollar extended its quarterly gains.
Chris Larkin, from E*Trade at Morgan Stanley, remarked, “Right or wrong, expectations for a June rate cut probably won’t shift unless inflation continues to rise and the labor market appears to be a major contributor to the increase.”
