Better-than-expected economic growth this week paired with rising stocks on Friday are leading to a winning week as the stock market continues to rally.
- On Friday, the Nasdaq Composite Index rose 0.56%, the S&P 500 Index added 0.4%, and the Dow Jones Industrial Average gained 0.4%.
- So far this month, all major averages are positive. This week the Dow gained 1.7%, and S&P 500 gained 2%. The Nasdaq is expected to reach its best performance since July.
- Tesla rose an additional 3% on Friday, following a 24% weekly gain.
- Intel dropped 8% after a disappointing earnings report. American Express jumped 9% despite missing top and bottom line projections.
- This year has started strong, rejecting the 2022 selloff trends. Nasdaq has grown 10.6%, the Dow 2.8%, and the S&P 6.1% so far this year.
Why it’s news
Better-than-expected fourth-quarter reports have investors more optimistic that the U.S. economy could have the soft landing the Federal Reserve has been planning for—especially after a positive stock season.
But the Fed is expected to start rate hikes again in the coming week, which could lead to further market volatility. Investors are preparing for a 25-basis-point hike at the next week’s meeting, CNBC reports.
One inflation measurement that the Fed uses, the personal consumption expenditures price index, shows that prices are elevated 4.4% from last year. That estimate matches the Dow Jones predictions.
“This year’s stock market rally is impressive and shouldn’t be ignored. Unfortunately, the Fed is likely to start talking down the market again, as early as next week, so prepare for volatility again this year; we may be in the eye of the hurricane and not completely out of the woods yet,” chief investment officer for Independent Advisor Alliance Chris Zaccarelli says.