US stocks are on the rise for the second consecutive day, bouncing back from a steep 10% drop last week. This rebound is fueled by gains in industrial and energy sectors, thanks in part to economic data that, while not perfect, alleviates fears of an immediate recession.
Almost 95% of companies in the S&P 500 saw their stock prices rise. However, big players like Tesla and Nvidia faced some losses. An equal-weighted version of the S&P 500, which treats all companies equally, outperformed the traditional index, showing strong demand across smaller firms. Recent retail sales numbers suggest that consumer spending is holding up, providing a glimmer of hope amid worries about a trade war.
David Lefkowitz from UBS Global Wealth Management pointed out that market corrections, like the recent drop, often present good buying opportunities. He noted that the spike in uncertainty has eased and that investor sentiment is stabilizing.
Treasury Secretary Scott Bessent, who has a long history in investment, shared his perspective on the downturn. He emphasized that market corrections are common and healthy. Bessent believes that with effective tax policies and energy strategies, the markets will thrive in the long run.
In numerical terms, the S&P 500 climbed 1%, the Nasdaq 100 gained 1.1%, and the Dow Jones increased by 1.2%. Despite a slight dip in the Bloomberg Magnificent 7 Total Return Index by 0.5%, the Russell 2000 Index saw a robust rise of 1.4%. The yield on 10-year Treasuries remained steady at 4.31%.
Bret Kenwell from eToro commented that the mixed retail sales data might inspire cautious optimism among investors. If consumers can sustain their spending, there’s potential for the economy to remain strong.
There’s also a noticeable shift in trading behavior. After the recent drop, traders are increasingly confident, shedding their protective bets against further declines. Data from Bloomberg reveals that the cost of options shielding against a 10% drop in the S&P 500 ETF Trust has significantly decreased, suggesting that many believe another major downturn is unlikely.
In summary, while the stock market is rebounding, there are strong signals indicating that consumers and investors are finding their footing again, providing hope for continued economic stability. For further insights on market trends, you can refer to Bloomberg’s latest analysis.
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Source linkBloomberg, Scott Bessent, S&P 500, Target Corp., Nvidia Corp., economic data
