S&P 500, Nasdaq Reach Record Closing Highs on Tuesday
Ever since U.S. markets took a tumble on Christmas Eve of last year, much has been made about an impending turnaround. Earlier this week those fears seemed far out of mind as the S&P 500 and the Nasdaq both closed at record highs. As for the Dow Jones Industrial Average, it wasn’t far behind either.
CNBC reports that the S&P closed 2,933.68 on Tuesday, besting the previous 2,930.75 seen in September 2018. Meanwhile the Nasdaq Composite Index was up 1.3% to close at a record 8,120.82. Its previous record was 8,109.69 set on August 29th of last year. Finally the Dow added 145 points from open to close, leaving it just over 1% away from an all-time high.
The main reasons believed to be behind this recent rally have been well worn: the Fed and trade. For the Federal Reserve’s part, the agency has signaled that it no longer plans to raise interest rates further this year. On the trade front, while trade talks with China have yet to yield many solid results, they have seemingly been improving. Summarizing the situation to CNBC, Captrust Advisors chief officer Kevin Barry said, “Both President Xi and President Trump cooled off the rhetoric and Fed Chairman Jerome Powell came out and reversed course.” Another factor has been a slew of better-than-expected earnings reports, leading to optimism for the future. As Spartan Capital Securities chief market economist Peter Cardillo explains, “Among the key companies that have reported, most of them have beaten expectations. That means we’re probably going to escape an earnings recession. That will be key for the market to rally from here.”
During the market’s successful day, President Trump took to Twitter to claim credit. Earlier in the day, the President had tweeted, “In the ‘old days’ if you were President and you had a good economy, you were basically immune from criticism. Remember, ‘It’s the economy stupid.’ Today I have, as President, perhaps the greatest economy in history…and to the Mainstream Media, it means NOTHING. But it will!” Later, after the closing bell, he added, “You mean the Stock Market hit an all-time record high today and they’re actually talking impeachment!? Will I ever be given credit for anything by the Fake News Media or Radical Liberal Dems?” Trump, who’s been dogged by questions about the recently-Mueller report, concluded that message with his new catchphrase, “NO COLLUSION!”
Although things on the market can always turn on a dime, the rebound seen this week is certainly notable. If nothing else it does seem to hold off fears of a recession for a while longer. Will the markets bring more good news in the coming weeks? We’ll have to wait and see.