Wall Street ended the session on a positive note, as investor concerns about turmoil in the banking sector dissipated and attention focused on the outlook for the future of monetary policy pursued by the US Federal Reserve.
The Standard & Poor’s 500 (S&P) 500 Index rose 0.57% to 4050.83 points While the Dow Jones Industrial Average increased by 0.43% 32859.03 points.
The Nasdaq Technology Composite Index rose 0.73% 12013.47 points.
“Investors seem increasingly confident that banking turmoil will continue to subside and that we are approaching the peak of key interest rates,” Jeff Kleintop, chief strategist at Charles Schwab, defended, telling Reuters.
Despite considering that Wall Street may still face the winds of volatility, the strategist believes that “definitely, a more optimistic tone has begun.”
For a specialist, the fact that the Nasdaq is leading in earnings means that this rally is “driven by stocks that are sensitive to the pace of growth and inflation,” which is why technology stocks are called growth stocks, being still very sensitive to changes. Monetary policy.
The market is beginning to anticipate a rate cut in 2023, after the Fed in its most recent “point chart” maintained its forecast that the fed funds rate should peak at 5.1% later this year.
Supporting this expectation, during the day were data on the latest applications for unemployment benefits, which were higher than expected, as well as a downward revision of the development of North American GDP in the fourth quarter of last year.
Looking forward to the next meeting of the Federal Reserve’s Open Market Committee, Investors are indicating a 53.8% chance that the Fed will raise the key interest rate by 25 basis points at the next meeting, with a 46.2% chance that there will be no change in the Fed rate.
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