Are We at the Peak of a V-Shaped Economic Recovery?
Wall Street started Tuesday with a decrease, with the Dow dropping by 0.1% and the S&P 500 declining by 0.04%. Meanwhile, the Nasdaq opened with a gain of 0.02% and settled with a record gain.
Shares on the NYSE rebounded, with the Dow Jones increasing by 0.20% or 68.61 points, to 33,945.58. The selective S&P 500 advanced 0.51% or 21.65 points, to 4,246.44. As for the Nasdaq, it advanced by 0.79% or 111.79 points, to 14,253.27.
As analysts expected, Jerome Powell kept talking about the transitory nature of inflation. However, the central bank chairman stated that inflation has considerably increased in recent months.
Powell’s remarks followed the Federal Reserve meeting last week when officials warned they could raise interest rates and begin tapering. The central bank statement led to a selloff on Wall Street. Still, stocks recovered on Monday, the S&P surging by 1.4%, recouping much of last week’s losses.
Tom Mantione, managing director at UBS Private Wealth Management, stated uncertainty over how the Fed may react to sustained inflation. And that puzzles the market even though the central bank has not changed its accommodative policy.
David Riley, a strategist at BlueBay Asset Management, stated that the peak of V-shaped economic recovery is approaching. It is a challenging period for corporate earnings.
Big tech companies surging on the Wall Street
Almost all corporate sectors closed with gains, led by non-essential goods, technology, and communications.
Among the Dow 30 listed on the Dow Jones, the companies with a notable advance were Nike with a rise of 1.85%, Home Depot advanced by 1.66%. Apple followed them with a raise of 1.27%, and Microsoft gained 1.10%.
As for the losses, Merck posted the steepest drop, yielding 0.73%. Meanwhile, Boeing lost 0.61%, and Salesforce plummeted by 0.56%.
