The U.S. stock market is poised to achieve a remarkable feat not seen since the days of President Richard Nixon. The S&P 500 index is on track to record its 14th weekly gain out of the past 15 weeks, a streak that hasn’t been matched since March 1972 when Nixon was still in office. This is an impressive milestone, considering the index’s inception back in 1957.
But it’s not just the duration of the winning streak that is noteworthy; it’s also the magnitude of the S&P 500’s rise during this period. Over the past 15 weeks, the index has surged by an impressive 21.8%, the largest advance over such a stretch since August 2020.
Today, the S&P 500 is set to close above the significant psychological level of 5,000 for the first time ever. This would mark its 10th record close of the year, highlighting the bullish sentiment in the market.
It’s worth noting that the Nasdaq Composite index is also on the verge of a historic winning streak. Like its counterpart, the Nasdaq is set to rise for the 14th week out of the past 15 on Friday. The last time the tech-heavy index achieved a similar feat was in a 15-week period that ended in August 1997.
If the Dow Jones Industrial Average manages to finish the week higher, it would be a remarkable achievement as well. The last time the Dow recorded a winning streak like this was in May 1995. Such consistent gains have only occurred 14 times since its creation in the late 19th century.
In summary, U.S. stocks are experiencing an exceptional period of success, with both the S&P 500 and Nasdaq Composite indices on historic winning streaks. These impressive performances demonstrate the current strength of the market and investor optimism.
U.S. Stocks Surge on Fed Pivot and Strong Economy
U.S. stocks have experienced a significant rise since reaching a near-term low point in late October, with the S&P 500 showing its weakest level in five months.
Federal Reserve’s Impact on Market
The primary driving force behind this upward trend in the market can be attributed to the Federal Reserve’s decision to pivot away from interest rate hikes. Instead, they are now considering keeping rates steady or potentially even cutting them later in the year. This insight comes from Chris Zaccarelli, Chief Investment Officer at Independent Advisors Alliance.
Zaccarelli stated, “The main reason the market has gone higher over the past 15 weeks has been the Fed pivot, the idea that the Fed is done raising interest rates to being on pause or cutting them. I think that’s a big catalyst for the rally that we have seen.”
Resilient U.S. Economy
Another contributing factor to the stock market rally is the unexpected strength of the U.S. economy throughout 2022. Despite concerns of a potential recession, it seems unlikely that it will occur anytime soon. Zaccarelli emphasized, “A recession never happened last year, and it doesn’t appear that it will be happening any time soon. I think that’s one of the big reasons we’ve had a rally over the last 14 months, let alone the last 15 weeks.”
Friday’s Trading Update
On Friday, U.S. stocks traded mostly higher, indicating a potential weekly gain for two out of three major indexes as well as the Russell 2000 RUT.
- The S&P 500 was up 15.5 points or 0.3%, reaching 5,013 during midday trading, showing a 1.1% weekly advance.
- The Nasdaq Composite experienced a 1% increase of 150 points, reaching 15,943, and is on track for a 2% weekly advance.
- Meanwhile, the Dow Jones Industrial Average saw a slight decline of 101 points or 0.3% to 38,624, potentially ending the week with a marginal loss.
- The Russell 2000 showed an increase of 14.5 points or 0.7%, reaching 1,994, indicating a 1.6% weekly advance.
In summary, the recent surge in U.S. stocks can be attributed to the Federal Reserve’s policy shift and the resilience of the U.S. economy.