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Stock Market Wrap-Up: September 27, 2024
A Day of Records and Robust Economic Indicators
The stock market closed on a high note on Thursday, September 27, 2024, with several key indices reaching new heights and economic indicators painting a positive picture of the U.S. economy.
Record Highs and Sector Performance
The S&P 500 returned to record levels, advancing 0.4% to both an intraday high and an all-time high close at 5,745.
The Dow Jones Industrial Average surged by 260.36 points, or 0.6%, to close at 42,175.11, marking a new record high. Out of the 30 stocks in the index, 20 ended the session with gains, while 10 saw losses.
The Nasdaq Composite, driven by its tech focus, rose by 108.09 points, also a 0.6% increase, closing at 18,190.29. This rally was largely fueled by strong performances from tech giants such as Advanced Micro Devices ($AMD) and QUALCOMM Incorporated ($QCOM), which saw gains of 3% and 2%, respectively.
Sector-wise, the Materials Select Sector SPDR ($XLB) and the Technology Select Sector SPDR ($XLK) were among the top performers, increasing by 2% and 1.3%, respectively. The Consumer Discretionary Select Sector SPDR ($XLY) also saw a 0.6% increase. However, the Energy Select Sector SPDR ($XLE) fell by 2%, reflecting the decline in oil prices.
Job Market Strength
One of the key drivers of the market's optimism was the robust data from the job market. According to the Labor Department, initial jobless claims fell to 218,000 for the week ending September 21, down by 4,000 from the previous week's revised figure. The four-week moving average decreased to 224,750, indicating a strong and stable labor market. Continuing claims also showed a decline, totaling 1,834,000 for the week ending September 14, further reinforcing the notion that layoffs remain low.
Economic Indicators and Inflation
The release of these job market figures, combined with an upgraded estimate of the nation’s gross domestic income for the last quarter—from an initial 1.3% to a new rate of 3.4%—boosted investor confidence. This positive economic data aligns with the Federal Reserve's recent decision to reduce the fed funds rate for the first time in four years, signaling a potential soft landing for the economy.
Investors are eagerly awaiting the release of the Personal Consumption Expenditures (PCE) index, which is expected to show that annual inflation fell to 2.3% in August, inching closer to the Fed's 2% annual target. This trend suggests that the Fed may continue easing interest rates, further supporting the market rally.
Oil Prices and Global Market Influences
Oil prices experienced a significant drop on Thursday, with Brent crude falling by 1.1%, or 2%, to $71.60 per barrel, and WTI crude decreasing by 2.1%, or 2%, to $67.67 per barrel. This decline was driven by reports that Saudi Arabia may abandon its $100 price target in an effort to increase production, potentially followed by other OPEC members and allies in December.
In addition to domestic factors, global market influences played a role in the day's trading. U.S.-traded shares of Chinese companies, such as Alibaba Group Holding ($BABA), PDD Holdings ($PDD), and JD.com ($JD), gained ground ahead of the opening bell due to China's introduction of various stimulus measures to boost its economy. The iShares MSCI China ETF ($MCHI) was up about 1%, reflecting this optimism.
Notable Stock Movements
Several stocks made significant moves on Thursday. Bristol-Myers Squibb ($BMY) surged 4% in premarket trading after receiving FDA approval for a drug to treat schizophrenia. However, Costco ($COST) was down about 1% after reporting earnings that slightly missed revenue expectations.
Large-cap tech stocks, which have been driving the broader market rally, were mostly higher. Apple ($AAPL), Microsoft ($MSFT), Amazon ($AMZN), Meta Platforms ($META), and Alphabet ($GOOGL) all saw slight gains. Despite this, Nvidia ($NVDA), which has been on a four-day winning streak, was down about 0.3%.
Market Sentiment and Volatility
The CBOE Volatility Index (VIX), often referred to as the fear gauge, dropped by 0.1% to 15. This decrease indicates a reduction in market volatility and increased investor confidence. Trading volume reached 12.5 billion shares on Thursday, surpassing the 20-session average. On the NYSE, advancing stocks outnumbered declining ones by a ratio of 1.94 to 1.
Real Estate and Durable Goods
In other economic news, pending home sales for August rose by 0.6%, although this was below the anticipated 1% increase. The July figures remained unchanged, showing a 5.5% decline. Durable goods orders for August 2024 were nearly flat, following a notable 9.9% rise in July.
Conclusion
Thursday's market performance was marked by record highs, strong economic indicators, and a positive outlook on inflation. The robust job market data and the potential for further interest rate cuts by the Fed have bolstered investor sentiment. As the market looks ahead to the release of key inflation data and other economic indicators, it remains poised for continued growth, driven by the resilience of the U.S. economy and the optimism surrounding global economic stimulus measures.
In this dynamic and ever-evolving market landscape, staying informed about the latest developments is crucial for making informed investment decisions. As we close out the trading day, it is clear that the stock market is navigating a complex interplay of domestic and global factors, but the overall trend suggests a continued upward trajectory.
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