U.S. stocks reached a record high on Wednesday, breaking out of a three-day lull. The S&P 500 climbed 0.9% to 5,248.49, the Dow Jones Industrial Average jumped 1.2% to 39,760.08, and the Nasdaq composite gained 0.5% to 16,399.52. Merck saw a 5% increase after receiving approval for a treatment for pulmonary arterial hypertension. Cintas also contributed to the S&P 500’s rise with an 8.2% jump in profits. Trump Media & Technology Group’s stock continued to soar, rising by 14.2%.
Robinhood Markets saw a 3.7% increase after introducing its first credit card for Gold members. On the other hand, Nvidia experienced a 2.5% drop after a significant increase earlier in the year. GameStop, a meme stock, tumbled 15% despite delivering a profit in the latest quarter. The bond market saw Treasury yields decrease, with the 10-year Treasury falling to 4.19%. On Friday, a key update on U.S. consumer spending will be released, which could impact both the bond and stock markets.
The S&P 500 is on track for a fifth consecutive winning month, with strong performance since late October. The U.S. economy has shown resilience despite high interest rates, prompting the Federal Reserve to consider lowering rates later this year. Traders expect the Fed to start cutting interest rates in June. Stocks tend to perform well when more than half of the world’s central banks are easing rates, prompting optimism for future market performance. In global markets, indexes in Europe and Asia were mixed, with Chinese stocks experiencing declines.
Critics caution that a broader range of companies will need to show strong profit growth to justify the recent market movements. Concerns about inflation persist, with reports coming in hotter than expected. Despite these challenges, the expectation is for the Federal Reserve to begin cutting rates to support economic growth. As the year’s first quarter comes to a close, anticipation for market movements continues to build. Investors will be closely watching for updates on economic indicators and central bank actions.
