S&P 500 Holds Steady Near Record Highs as Fed Meeting Approaches
The S&P 500 recorded another record close on Monday following three consecutive weeks of gains. Monday’s gains of about 0.2% come ahead of this week’s crucial Fed meeting.
Stocks ascended steadily in the past few weeks to all-time highs. The S&P 500 gained 13% this year and rose by nearly 90% from its March 2020 low.
The Nasdaq Composite gained 0.7% as Apple and Netflix rose by more than 2%. Amazon also registered gains, and The Dow Jones Industrial Average fell 110 points.
As bond yields decrease, investors are giving tech stocks another chance. The 10-year Treasury hit a three-month low by going below 1.43% on Friday, and Cathie Wood’s Ark Innovation posted a 6% weekly gain. Tesla also climbed nearly 1.3%
Earlier, Elon Musk announced that Tesla would resume allowing bitcoin transactions once it is confirmed that miners are using clean energy. His tweet boosted the popular digital currency, and Bitcoin popped back to above $40,000 at the start of the week.
Investors are waiting for the outcome of the Fed meeting, scheduled for Wednesday. Although the central bank isn’t expected to take any actions, its forecasts on interest rates, inflation, and the economy will likely affect markets.
Chief investment strategist for State Street Global Advisors, Michael Arone, said investors “are going to be looking for signs that the Fed might believe that inflation is more permanent.”
Last week, the S&P index rose 0.4% for its third straight positive week, reaching a new high. Chief investment strategist at the Leuthold Group, Jim Paulsen, believes that “any evidence suggesting monetary tightening is being moved forward will likely bring volatility to the stock market.”
“Because the S&P 500 Index reached yet another new record high last week, investors will be watching to see if this signals even higher levels near term,” Paulsen opined.
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