Wall Street Extends Rally with S&P 500 and Nasdaq Gaining for 5th Consecutive Day
Coinspeaker
Wall Street Extends Rally with S&P 500 and Nasdaq Gaining for 5th Consecutive Day
On Wednesday, August 25, the US stocks continued with their rally further at Wall Street. The Dow Jones Industrial Average (INDEXDJX: .DJI) gained 0.1% or 39 points closing at 35,405 levels.
On the other hand, the S&P 500 (INDEXSP: .INX) and the Nasdaq Composite (INDEXNASDAQ: .IXIC) gave record high closing. Each of these two indices surged 0.2% and 0.1% respectively on Wednesday.
Wall Street Rally
Besides, the benchmark 10-year Treasury note also saw its yield rising 1.352% on Wednesday. This further helped banks to rally at Wall Street. Stocks of JPMorgan (NYSE: JPM) and Wells Fargo (NYSE: WFC) surged 2.06% and 1.9% respectively.
Apart from just banking, stocks registered gains in other sectors as well. Stocks for air carriers and cruise lines surged 1% for most of the session. Travel and leisure stocks surged higher with MGM Resorts (NYSE: MGM) gaining 2.98%.
Stocks of chipmakers also registered an upward momentum. For e.g. Western Digital (NASDAQ: WDC) gained a massive 7.80% on Wednesday, August 25. A report from WSJ suggested that the company is in advanced talks for a merger with Japan’s Kioxia Holdings.
Similarly, NVIDIA stock (NASDAQ: NVDA) gained 1.93%. This happened as the Department of Energy announced running its supercomputers on NVIDIA’s computing platform. The surge in delta variant cases in the US has put some dark clouds on Wall Street.
But citing a recent drop in the positivity rate in Texas and Florida, Fundstrat analyst Tom Lee believes the worst is behind us. In a note to the client, Lee wrote:
“We realize equity markets have been choppy and the wide variance of perspective means investors do not have an easy consensus. But our central case remains that we are shifting further into full risk-on, with an ‘everything rallies’ into” year-end”.
Additional Gains Ahead this Year
Analysts expect further gains in the market ahead this year. Christopher Harvey, the head of the equity strategy at Wells Fargo Securities expects further gains.
Earlier this week, Harvey gave the S&P 500 a target of 4,825 levels by the year-end. It means that the world’s largest market index is set to gain another 7.5% from its current record highs. In a note to clients, Harvey wrote:
“Over the last 31 years, there have been nine instances where the S&P 500 had a price return of 10%+ in the first eight months of the year; over the next four months, the index averaged another +8.4%. None of these instances produced a negative return during those last four months”.
The most awaited event with the Federal Reserve – Jackson Hole symposium – kicks off later today. All eyes will be on whether the US central bank is dialing back on its $120 billion bond purchase program. It will be interesting to see whether if the Fed will delay its plans to taper stimulus.
Vaccination drive is going on in full swing with Pfizer Inc (NYSE: PFE) securing full approval from the USFDA. On Wednesday, Johnson & Johnson (NYSE: JNJ) said that its COVID-19 booster shot gave promising early-stage clinical trials results.
Wall Street Extends Rally with S&P 500 and Nasdaq Gaining for 5th Consecutive Day