On July 12, 2024, Wall Street experienced a significant surge, with the S&P 500 and Dow Jones Industrial Average reaching record highs. Investors are anticipating a rate cut by the Federal Reserve in September, leading to increased confidence in the market.
The S&P 500 rose by 0.55% to 5,615.35 points, the Dow Jones Industrial Average increased by 0.62% to 40,000.90 points, and the Nasdaq gained 0.63% to 18,398.45 points. Tech stocks like Apple and Nvidia saw strong performances, with Tesla experiencing a 3% surge.
The market optimism is reflected in the S&P 500’s 0.9% gain, the Nasdaq’s 0.2% increase, and the Dow’s 1.6% rise over the week. Small-cap and mid-cap indexes also saw positive growth, indicating a shift in market dynamics. Analysts expect a significant 9.6% increase in second-quarter earnings for S&P 500 companies, driven by the tech sector.
The anticipation of a Fed rate cut is fueling investor sentiment and market gains. Traders are confident in a rate cut by September, with a 94% certainty compared to 78% the previous week. This expected rate cut could lower borrowing costs, stimulate economic activity, and benefit equities and broader economic growth. However, the market’s sensitivity to fiscal policies and the Fed’s need to balance economic growth without overheating are important factors to consider.