Stock Market Update: Dow and S&P 500 Reach Record Highs
Dow and S&P 500 Hit All-Time Highs
The Dow and S&P 500 closed at new record highs Thursday, posting their best first-quarter performance since 2009. The rally expanded beyond the tech sector, driven by optimism surrounding potential rate cuts and positive economic data indicating a soft landing for the economy.
At 16:00 ET (20:00 GMT), the Dow rose 47 points, or 0.1%, reaching a record close of 39,807.37. The S&P 500 also rose 0.1% to a fresh record close of 5,254.35. However, the Nasdaq fell 0.2%. In Q1, the S&P 500 gained about 10%, marking its best first-quarter performance since 2019, while the Dow rose nearly 6%, its strongest showing since 2021.
Positive Economic Data
The U.S. economy saw faster growth than previously estimated in the fourth quarter, with revised data showing a 3.4% annualized rate, up from the previously reported 3.2%. The revision was driven by increased consumer spending, nonresidential fixed investment, and state and local government spending, supported by a strong labor market.
Additionally, initial claims for state unemployment benefits dropped by 2,000 to a seasonally adjusted 210,000 for the week ended March 23.
Fed Comments and Market Outlook
Investors hesitated to build on previous gains after Fed Governor Waller stated that there was no rush for the Fed to cut interest rates, citing higher-than-expected inflation readings. While Waller acknowledged a potential rate cut later in the year, he highlighted the current strength of the U.S. economy, providing room to maintain higher rates for a longer period.
Market focus shifted to Friday’s release of the Fed’s preferred inflation gauge, the PCE data, which is expected to influence U.S. interest rate expectations. Additionally, speeches from Fed officials and economic indicators are anticipated on Friday.
Company Updates
RH stock surged over 7% as the home furnishing company reported exceptional demand for its new products. Walgreens Boots stock rose 3% after beating sales expectations but adjusting its earnings outlook due to retail challenges.
Take-Two Interactive Software stock increased 1% following its agreement to acquire Gearbox Entertainment. Home Depot closed flat after announcing plans to purchase SRS Distribution in an $18.25 billion deal.
Crypto News
Sam Bankman-Fried, the founder of FTX cryptocurrency exchange, was sentenced to 25 years in prison for allegedly stealing $8 billion from customers. The crypto market rebounded, with BTC up 3.2% to $70,872 in recent trading.
