- U.S. stocks hit all-time highs
- Optimism grows amid economic recovery
- Tech and market sentiments surge
On Friday, U.S. equities surged to all-time highs, propelled by tech stocks and growing optimism regarding the economy.
At 4,839.8, the S&P 500 index, which measures the stock performance of the largest corporations in the United States, closed the day up 1.2%, surpassing its previous high set in January 2022.
The recent ascent signifies a resurgence following the decline it endured two years ago.
During that time, markets were concerned about the economy’s response to inflation.
Currently, with the subsidence of inflationary pressures and the diminishing likelihood of an economic recession, investors have resumed their stock holdings.
As optimistic investors purchased shares, the Dow Jones Industrial Average, which measures companies designed to be representative of the economy, rebounded to set a new high late last year.
It reached a fresh all-time peak on Friday, increasing by 1% for the day.
The Nasdaq, which lists numerous technology companies, increased by 1.7% but is still approximately 4% below its apex from 2021.
The new S&P record definitively marks the current period for Wall Street, as shares have recovered 35% from their low point in October 2022, during a period of rising share prices known as a bull market.
The expectation that the US central bank, which drastically increased interest rates in 2022 in an effort to cool the economy and slow price increases, is nearing a victory declaration and possibly reversing course later this year has boosted investor sentiment.
That would reduce the cost of financing and alleviate pressure on the economy, which would be beneficial for businesses. Simultaneously, rate reductions would entice investors away from interest-bearing investments and towards shares, resulting in an additional price increase.
Additionally, tech firms have been buoyed by optimism that developments in artificial intelligence will spur new expansion.
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The public is also benefiting from the improvement in sentiment, as retirement and investment accounts have begun to recover, petrol prices have decreased, and price increases for other items have slowed.
A closely followed barometer of sentiment, the monthly survey of consumers conducted by the University of Michigan, revealed on Friday that sentiment for this month had reached its highest point since 2021, an increase of over 21% compared to the same period last year.
According to the survey, consumer sentiment was bolstered by assurances that inflation had reached a nadir and by rising income expectations.
Sentiment has increased by a cumulative 29% over the past two months, the most significant two-month increase since 1991, when the recession concluded.
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