The S&P 500 just capped off its strongest week of 2024, climbing 3.9% over five trading days—a rally that’s got Wall Street buzzing.
This rebound follows a steep sell-off earlier this month, driven by a slew of upbeat economic data suggesting the economy’s easing off the gas but not slamming on the brakes.
By the close of Friday’s trading, the S&P 500 and Nasdaq both edged up 0.2%, while the Dow Jones Industrial Average added 97 points.
Meanwhile, the 10-year Treasury yield dipped by 3 basis points to 3.89%, wrapping up the week with a 6 basis point drop.
Investors seem to be dialing back their expectations for aggressive rate hikes from the Federal Reserve.
So, what’s behind this rally? It all kicked off with fresh inflation data showing that consumer prices slipped below 3% for the first time in three years—a clear sign that inflationary pressures are easing.
Then, an unexpected 1% jump in retail sales and the lowest jobless claims in five weeks added more fuel to the fire.
Goldman Sachs weighed in, urging investors to keep their cool amid the market’s wild swings.
The firm’s analysts are sticking to their guns, predicting that the U.S. economy will slow down gently, continuing to grow while inflation tapers off—no crash landing in sight.
“From a market standpoint, we again think it makes sense to lean against extreme concerns and keep the faith in the modal view of continued expansion and decelerating inflation, rather than an imminent recession,” Goldman’s note read, offering a steady hand in choppy waters.
Why does this matter? The S&P 500’s stellar week, propped up by encouraging economic signals, could be a harbinger of more stability ahead.
With inflation cooling, consumer spending on the rise, and fewer people filing for unemployment, it looks like the economy is on solid footing.
This stability is crucial for the business community as it navigates these uncertain times.
But don’t get too comfortable just yet.
All eyes are on next week’s economic symposium in Jackson Hole, Wyoming, where investors hope to glean clues about the Fed’s next moves.
What happens there could set the stage for September’s market developments.
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