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Wall Street ended sharply higher on Thursday, driven by economic data that lifted investor mood. Market participants are currently betting on the fact that we may have reached the end of the Fed’s aggressive rate-hike cycle. Treasury yields fell on inflation numbers cooling down. All of the three major indexes ended firmly in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 1.3% or 428.73 points to close at 34,408.06. Twenty-eight components of the 30-stock index ended in positive territory, while two ended in negative.
The S&P 500 added 1.2%, or 53.25 points to close at 4,425.84. All 11 broad sectors of the benchmark index ended in positive territory. The Communication Services Select Sector SPDR (XLC), the Health Care Select Sector SPDR (XLV) and the Industrials Select Sector SPDR (XLI) advanced 1.6%, 1.6% and 1.5%. The Technology Select Sector SPDR (XLK) rose 1.3%, continuing its northward climb.
The tech-heavy Nasdaq advanced 156.34 points, or 1.2%, to finish at 13,782.82.
The fear-gauge CBOE Volatility Index (VIX) was up 4.5% at 14.50. A total of 11.8 billion shares were traded on Thursday, higher than the last 20-session average of 10.9 billion. Advancers outnumbered decliners on the S&P 500 by a 7.1-to-1 ratio. The S&P 500 recorded 48 new highs and no new lows, while the Nasdaq posted 80 new highs and 72 new lows.
Rate Hikes Might be in Their Last Lap
At the conclusion of the June FOMC meeting on Wednesday, Fed Chair Jerome Powell had said that the central bank would use the six weeks until its next meeting to take into account the cumulative tightening of monetary policy since the cycle started in 2022. He also mentioned that the Fed had not decided a rate hike in July. The upbeat mood seen in the stock market on Thursday shows that investors remain hopeful that the slew of economic data being released currently would deter the Fed from reverting to its aggressive policy tightening measures anytime soon.
The S&P 500 and the Nasdaq shot up on Thursday to close at their highest level in 14 months. Even as Fed officials mentioned that they foresaw another half a percentage point hike this year and the CME Fedwatch tool mentions a possible 25 bps hike in July itself, recently released economic data shows that the economy remains resilient and inflation is on a downward curve. This pushes investors to hedge their bets on the Fed not being as hawkish as it claims to be currently. This resulted in a broad-based stock rally on Thursday, while treasury yields fell on clear signs of subsiding inflation.
The Labor Department said on Thursday that initial jobless claims came in at 262,000, unchanged for the week ending Jun 10. The previous week's level was revised up by 1,000 from 261,000 to 262,000. The four-week moving average increased to 246,750, a rise of 9,250 from the previous week’s revised average of 237,500. This is the highest level for this average since Nov 20, 2021, when it was 249,250.
Continuing claims came in at 1,775,000 for the week ending Jun 3, increasing 20,000 from the previous week’s revised level. The previous week's numbers were revised down by 2,000 from 1,757,000 to 1,755,000. The 4-week moving average came in at 1,778,250, a decrease of 6,000 from the previous week's revised average. The previous week's average was revised down by 500 from 1,784,750 to 1,784,250.
The U.S. Census Bureau reported that retail sales for May 2023, adjusted for seasonal variation and holiday and trading-day differences but not for price changes, were $686.6 billion, up 0.3% from the previous month. In April, it had increased 0.4%.
Per the Fed, Industrial production edged down 0.2% in May following two consecutive months of increases. In April, it had gone up 0.5%.
Capacity utilization moved down to 79.6% in May, a rate that is a 0.1 percentage point below its long-run (1972–2022) average. The April number was revised up to 79.8 from 79.7.
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Stock Market News for Jun 16, 2023
Wall Street ended sharply higher on Thursday, driven by economic data that lifted investor mood. Market participants are currently betting on the fact that we may have reached the end of the Fed’s aggressive rate-hike cycle. Treasury yields fell on inflation numbers cooling down. All of the three major indexes ended firmly in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 1.3% or 428.73 points to close at 34,408.06. Twenty-eight components of the 30-stock index ended in positive territory, while two ended in negative.
The S&P 500 added 1.2%, or 53.25 points to close at 4,425.84. All 11 broad sectors of the benchmark index ended in positive territory. The Communication Services Select Sector SPDR (XLC), the Health Care Select Sector SPDR (XLV) and the Industrials Select Sector SPDR (XLI) advanced 1.6%, 1.6% and 1.5%. The Technology Select Sector SPDR (XLK) rose 1.3%, continuing its northward climb.
The tech-heavy Nasdaq advanced 156.34 points, or 1.2%, to finish at 13,782.82.
The fear-gauge CBOE Volatility Index (VIX) was up 4.5% at 14.50. A total of 11.8 billion shares were traded on Thursday, higher than the last 20-session average of 10.9 billion. Advancers outnumbered decliners on the S&P 500 by a 7.1-to-1 ratio. The S&P 500 recorded 48 new highs and no new lows, while the Nasdaq posted 80 new highs and 72 new lows.
Rate Hikes Might be in Their Last Lap
At the conclusion of the June FOMC meeting on Wednesday, Fed Chair Jerome Powell had said that the central bank would use the six weeks until its next meeting to take into account the cumulative tightening of monetary policy since the cycle started in 2022. He also mentioned that the Fed had not decided a rate hike in July. The upbeat mood seen in the stock market on Thursday shows that investors remain hopeful that the slew of economic data being released currently would deter the Fed from reverting to its aggressive policy tightening measures anytime soon.
The S&P 500 and the Nasdaq shot up on Thursday to close at their highest level in 14 months. Even as Fed officials mentioned that they foresaw another half a percentage point hike this year and the CME Fedwatch tool mentions a possible 25 bps hike in July itself, recently released economic data shows that the economy remains resilient and inflation is on a downward curve. This pushes investors to hedge their bets on the Fed not being as hawkish as it claims to be currently. This resulted in a broad-based stock rally on Thursday, while treasury yields fell on clear signs of subsiding inflation.
Consequently, shares of T-Mobile US, Inc. (TMUS - Free Report) and Microsoft Corporation (MSFT - Free Report) rose 3.7% and 3.2%, respectively. Each carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
The Labor Department said on Thursday that initial jobless claims came in at 262,000, unchanged for the week ending Jun 10. The previous week's level was revised up by 1,000 from 261,000 to 262,000. The four-week moving average increased to 246,750, a rise of 9,250 from the previous week’s revised average of 237,500. This is the highest level for this average since Nov 20, 2021, when it was 249,250.
Continuing claims came in at 1,775,000 for the week ending Jun 3, increasing 20,000 from the previous week’s revised level. The previous week's numbers were revised down by 2,000 from 1,757,000 to 1,755,000. The 4-week moving average came in at 1,778,250, a decrease of 6,000 from the previous week's revised average. The previous week's average was revised down by 500 from 1,784,750 to 1,784,250.
The U.S. Census Bureau reported that retail sales for May 2023, adjusted for seasonal variation and holiday and trading-day differences but not for price changes, were $686.6 billion, up 0.3% from the previous month. In April, it had increased 0.4%.
Per the Fed, Industrial production edged down 0.2% in May following two consecutive months of increases. In April, it had gone up 0.5%.
Capacity utilization moved down to 79.6% in May, a rate that is a 0.1 percentage point below its long-run (1972–2022) average. The April number was revised up to 79.8 from 79.7.