Record Highs for Dow and S&P 500

On Monday, both the Dow and S&P 500 achieved new record highs in the United States and Europe, driven by growing optimism for the American economy. The positive sentiment remained unaffected by expectations that the Federal Reserve might delay interest rate cuts, as many investors had anticipated. This upbeat mood set the stage for a week packed with corporate earnings reports from major companies such as United Airlines, Procter & Gamble, Tesla, and Netflix.

Investors are particularly attentive to the upcoming data on fourth-quarter US economic growth, scheduled for Thursday, as it could provide insights into the timing of potential interest rate adjustments by the Federal Reserve. Pierre Veyret, an analyst at ActivTrades, noted, “Optimism is back, more and more investors think the downward trend for stocks is over.”

The Dow traded above the 38,000 level for the first time, and the S&P 500 continued its upward trajectory from the previous week’s record close. Peter Cardillo of Spartan Capital highlighted the enthusiasm building up with a flurry of earnings reports beginning.

In Europe, while the European Central Bank is not expected to cut rates at its upcoming policy meeting, President Christine Lagarde’s recent statement about possible rate cuts this summer has heightened market interest. In the US, data indicating persistent inflation and a resilient job market have contributed to the Fed’s cautious approach, as revealed in minutes from its recent meeting.

Asian equities closed mixed, with Japanese stocks benefiting from a weaker yen and rising inflation. However, concerns about China’s economic weakness led to heavy selling in Shanghai and Hong Kong.

Oil prices experienced choppy trading, with geopolitical concerns in the Middle East offsetting a reduced demand growth forecast by the International Energy Agency.

Key Figures around 2130 GMT:

  • New York: Dow up 0.4% at 38,001.81 points, S&P 500 up 0.2% at 4,850.43, Nasdaq Composite up 0.3% at 15,360.29
  • London: FTSE 100 up 0.4% at 7,487.71
  • Paris: CAC 40 up 0.6% at 7,413.25
  • Frankfurt: DAX up 0.8% at 16,683.36
  • Tokyo: Nikkei 225 up 1.6% at 36,546.95
  • Hong Kong: Hang Seng Index down 2.3% at 14,961.18
  • Shanghai: Composite down 2.7% at 2,756.34
  • Euro/dollar down at $1.0885, Dollar/yen up at 148.13 yen, Pound/dollar up at $1.2708, Euro/pound down at 85.63 pence
  • West Texas Intermediate up 2.4% at $75.19 per barrel, Brent North Sea Crude up 1.9% at $80.06 per barrel

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