Nasdaq Hits Record Second Highest
June 17-The US stock market Nasdaq index rose on Thursday as confidence in a strong economic recovery pushed investors to buy technology stocks, but the follow-up impact of the Federal Reserve (Fed) policy statement made S&P The 500 index fell slightly.
This is the third consecutive day that the S&P 500 closed lower, while the Dow Jones Industrial Average fell for the fourth consecutive day.
Many investors are still digesting the Fed’s unexpected hawkish information on monetary policy the day before, that the Fed expects that the first interest rate hike after the pandemic will occur in 2023.
Federal Reserve officials said that with the rapid recovery of the US economy from the epidemic and improved economic prospects, the overall economic growth rate this year is expected to reach 7%. Although the Fed is careful not to derail the economic recovery—supportive policy measures such as bond purchases will not end in the short term—the signal to raise interest rates highlights concerns about inflation.
Technology stocks usually perform better when interest rates are low. Last year they drove the US stock market up as investors flocked to stocks that were considered relatively safe during economic turmoil.
On Thursday, investors returned to technology stocks. After the chip maker Nvidia raised its target price, its stock price rose 4.8% and set a new closing high for the fourth consecutive trading day.
At the same time, Apple, Microsoft, Amazon, and Facebook got rid of their pre-market decline, closing the day with gains ranging between 1.3-2.2%, as investors believed that a stable economic recovery would boost demand for these companies’ products in the long run.
The Nasdaq index closed 13 points lower than the record closing high set on Monday, but it was still the second highest closing level in the history of the index.
The Dow Jones Industrial Average closed down 210.22 points, or 0.62%, to 33,823.45 points; the S&P 500 index closed down 1.84 points, or 0.04%, to 4,221.86 points; the Nasdaq Index closed up 121.67 points, or 0.87%, to 14,161.35 points .
Bank stocks that are sensitive to interest rates plunged 4.3% as yields on longer-term U.S. Treasuries fell.
After the Fed’s policy meeting, the dollar strengthened, pushing U.S. crude oil prices back from multi-year highs touched earlier this week. Energy stocks fell 3.5%, the worst performance among the 11 major sectors of the S&P 500 Index.
Economically sensitive materials stocks and industrial stocks fell 2.2% and 1.6%, respectively. Previously released data showed that the number of initial claims for unemployment benefits in the United States increased last week for the first time in a month and a half, but layoffs are decreasing when the economy restarts and there is a shortage of workers willing to work.
A total of approximately 11.77 billion shares traded on US stock exchanges, while the average daily trading volume over the past 20 trading days was 10.67 billion shares.
23 S&P 500 index stocks hit a 52-week high, two constituent stocks hit a new low; 82 Nasdaq index stocks hit a new high, 37 hit a new low. ,