Stocks rally ahead of the Fed's symposium, with investors anticipating key insights on interest rates
On Monday, stocks advanced as investors prepared for the highly anticipated Federal Reserve symposium later this week, as reported by CNBC.
The Dow Jones Industrial Average increased by 236.77 points, or 0.58 percent, closing at 40,896.53. The S&P 500 gained 0.97 percent, reaching 5,608.25, while the Nasdaq Composite rose 1.39 percent to end at 17,876.77.
Both the S&P 500 and Nasdaq achieved their eighth consecutive day of gains, a milestone for 2024.
This rise in the markets extends a recent recovery rally, which follows a volatile period for equities. Last week, the three major indexes posted their strongest gains of the year.
The month of August began with turbulence, as disappointing data stoked fears of a recession and concerns that the Federal Reserve was slow to reduce interest rates. These fears led to a global sell-off, resulting in the S&P 500 experiencing its worst day since 2022 on August 5.
However, the release of fresh data last week helped ease market anxieties. Positive retail sales figures, lower initial jobless claims, and strong earnings from Walmart contributed to a more optimistic outlook.
Additionally, the annualized inflation rate, as measured by July's consumer price index, dropped to its lowest level in over three years.
Greg Marcus, managing director of UBS Private Wealth Management, noted that “the market has almost fully recovered from the overblown recession fears earlier this month,” but he also warned that “volatility is likely to remain high for the rest of the year.”
Marcus added that while the outlook remains generally positive, “we don’t expect a straight upward trajectory in the market. The economy is slowing, and conflicting economic data in the coming months will likely keep the recession debate ongoing.”
Investors are now looking to Federal Reserve Chair Jerome Powell’s speech on Friday at the central bank’s symposium in Jackson Hole, Wyoming, for clues on the future of interest rates. Hopes are growing for a potential rate cut.
Before that, traders will closely examine the minutes from the Fed's most recent meeting, set to be released on Wednesday.
The Democratic National Convention also begins this Monday, adding another event to the week’s agenda.
