The stock market in New York, USA, saw a positive start to the week, with stocks closing near session highs on Monday. The S&P 500 index recorded its best three-day run in the year 2024, carrying momentum from an end-of-week surge triggered by a softer-than-expected jobs report. This report increased expectations for an earlier rate cut by the Federal Reserve. The S&P 500 gained 1%, while the Nasdaq Composite rose by 1.2%, and the Dow Jones Industrial Average increased nearly 0.5%.
Investors reacted positively to a “Goldilocks” jobs report, striking a balance that pleased both the markets and the Federal Reserve. This led to increased bets on an imminent rate cut from the Fed, with over two-thirds of traders now anticipating a cut in September and possibly two cuts by the end of the year. The return of Fedspeak, as free-speaking Fed officials are now untethered from a pre-meeting blackout period, further influenced market sentiment.
New York Fed President John Williams expressed a data-driven approach to rate cut decisions and reassured that there would be cuts eventually, emphasizing that monetary policy is currently in a stable position. Meanwhile, Federal Reserve Bank of Richmond President Thomas Barkin shared optimism about inflation coming down to 2% in the future.
In corporate news, Disney’s upcoming quarterly earnings report took center stage as earnings season drew to a close. The company’s stock has seen a significant increase of over 25% this year. On the other hand, Apple shares experienced a slight dip after Warren Buffett’s Berkshire Hathaway disclosed a reduction in the company’s holdings over the weekend.
Boeing faced some challenges as the Federal Aviation Administration launched a new probe into the aircraft maker’s 787 Dreamliner following reported lapses in required inspections. However, Boeing assured that the issue did not pose an immediate safety threat.
In conclusion, the market’s positive performance was driven by a mix of economic data, corporate earnings, and geopolitical factors. The week ahead holds key events such as Disney’s earnings report and developments in the ongoing Boeing saga. Investors remain vigilant as they navigate through the ever-changing landscape of the financial markets.