Wall Street’s bullish momentum persists as major indices hit record highs, with the Dow closing at 43,810 and the S&P 500 reaching 5,984. The Nasdaq Composite surged to 19,300. Investor confidence is reflected in a declining VIX index and significant gains from leading tech firms. The Federal Reserve’s decision to lower interest rates aims to address stable inflation, while recent productivity data shows a 2.2% increase amid rising unit labor costs and a slight uptick in unemployment claims.
Wall Street’s Bullish Rally Continues
The optimistic trend on Wall Street shows no signs of slowing down, as the market celebrates a series of record-breaking performances. The Dow Jones closed at 43,810, just shy of a record by a mere 0.00001%. Meanwhile, the S&P 500 reached a new high of 5,984, marking a bullish gap with a 0.75% increase, with expectations to hit 6,000 by the end of the week. The Nasdaq Composite also surged to 19,300, reflecting a 1.5% rise and inching closer to the coveted 20,000 milestone.
Market Insights and Economic Indicators
The Russell 2000 index crossed the 2,400 mark once again, despite a slight consolidation at the close with a decrease of 0.35%, following a notable 5.85% increase the previous day. The Dow Transportation index set a new record at 17,500 before settling at 17,210, down 1.45% after a robust 5.5% rise on Wednesday.
Investor confidence is evident as the VIX index dropped an additional 6.6%, reaching 15.2, a stark contrast to the 22 observed earlier in the week. The Nasdaq-100 climbed past 21,000, propelled by the “fantastic seven” tech giants, which collectively achieved several all-time highs. Nvidia rose by 2.2%, boasting a market cap of $3.65 trillion, while Amazon and Meta also hit remarkable milestones. The combined market capitalization of these seven companies now stands at an astounding $15.675 trillion, accounting for 54% of the U.S. GDP.
In the realm of monetary policy, the Federal Reserve made a unanimous decision to lower the key interest rate by 25 basis points, now ranging between 4.50% and 4.75%. This decision came in light of stable inflation trends and a proactive approach to mitigate any potential economic slowdown.
Recent statistics indicate a 2.2% increase in non-farm productivity for the third quarter of 2024, driven by a 3.5% rise in total output against a 1.2% increase in hours worked. However, this productivity growth fell short of the 4.2% increase in hourly wages, resulting in a 1.9% rise in unit labor costs. Additionally, last week saw 221,000 new unemployment claims, up by 3,000 from the previous week, reflecting ongoing shifts in the labor market.