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S&P 500 and Nasdaq Soar Amid Bets on Peaking US Interest Rates

With US Federal Reserve's interest-rate hike nearing its climax, investors are riding high, pushing the S&P 500 and Nasdaq to a 14-month record.


A Leap in the S&P 500 and Nasdaq Amid Economic Forecast

The S&P 500 and Nasdaq leaped to 14-month highs on Thursday. This uptick occurred as investors, fueled by fresh economic data, gambled on the impending end of the US Federal Reserve's intense interest-rate increase scheme.

Soothing Inflation Fears Drive Treasury Yield Slide

Treasury yields experienced a decrease, following a barrage of economic indicators pointing toward deflation. This data mitigated concerns about future interest rate hikes.

Rising Retail Sales and Jobless Claims: An Economic Mixed Bag

In an unexpected twist, US retail sales saw an increase in May, with consumers spending on a variety of goods, including vehicles. In contrast, jobless claims remained at a seasonally adjusted 262,000 for the week ending June 10, exceeding economists' predictions of 249,000 claims.

Import Prices Tumble Amid Stubborn Inflation

May witnessed a decrease in import prices, with the annual reduction being the steepest in three years. This followed a report released on Tuesday, indicating that headline inflation in April was less than anticipated.

The Fed's Stance and Market Response

In the face of stubbornly persistent inflation and a resilient US economy, the Federal Reserve kept rates in the 5%-5.25% range. Despite the indication of a potential half-a percentage point hike this year, the market remains optimistic due to softer inflation data and robust economic performance post the Fed meeting.

Sector-Wide Gains Bolster Market Performance

Sectors traditionally sensitive to economic health fluctuations saw widespread gains. Health care led the pack with a 1.37% increase, closely followed by a 1.22% rise in energy, while oil prices rallied.

Stock Market Victors Amid Receding Recession Fears

As recession fears abate, sidelined money is finding its way back to equities, resulting in stocks like Microsoft and Meta Platforms gaining over 2% each.

Performance Overview of Key Indices in 2023

The S&P 500 and Nasdaq have had an impressive run so far in 2023, with increases of 15% and 31% respectively. This surge is fueled by signs of economic resilience, an exceptional earnings season, and the belief that interest rates are nearing their peak.

Retail and E-Commerce: Wins and Losses

On the flip side, Kroger Co saw a 2.8% dip after missing first-quarter revenue estimates. Meanwhile, Kohl's Corp and Chinese companies Alibaba Group and witnessed a rise in their shares.

S&P 500 vs Nasdaq: A Snapshot of Highs and Lows

The ratio of advancing to falling issues within the S&P 500 was 5.0-to-one. While the S&P 500 posted 36 new highs and no new lows, the Nasdaq had a more varied performance, recording 59 new highs and 65 new lows.