S&P 500 was close to a record high on Friday
US equities put in a solid performance last week, with the S&P 500 coming close to the record high posted in July.
Wall Street saw its best week since November 2023 with the S&P 500 up 0.2% for a seventh consecutive gain, the Dow Jones Industrial Average was up 96 points (0.2%) and the Nasdaq also advanced by 0.2%.
"What we’re seeing in today's markets is an extension of the comeback and the calming of earlier recession fears," Greg Bassuk, CEO of AXS Investments in New York told Reuters. "The positive economic data is really what's fueling this rally, giving greater confidence to investors that are recession is likely to be avoided, and that the Fed will begin cutting rates in September."
Stocks have been rallying thanks to continued gains in confidence that the US economy will avoid recession and that the Fed will start cutting rates as soon as next month, depending on its reading of the fine balance between controlling inflation and over-slowing the economy.
Further signals should be provided by this week’s Jackson Hole symposium where Fed chair Jerome Powell is expected to give some clarity on what will happen next.
“Data released over the past week has struck the right balance, being not too hot, nor too cold,” wrote UBS head of investment for global wealth management Mark Haefele. “This should help allay both concerns of a looming recession or that sticky inflation will hamper the Federal Reserve if swift rate cuts are needed to defend growth.”
