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S&P 500 stock index reported a new record

At the close of trading on Wednesday, the US S&P 500 reached a new high close on the back of the Central Bank’s intentions to continue providing monetary support to the stock market and the economy. As for the overall trading results, they ended in different directions due to the strengthening of the oil and gas, technological and financial sectors. The negative dynamics was observed from the sectors of consumer goods, raw materials and health care. Thus, the indicator of the broad market S&P 500 increased by 0.1%, having reported 4079.95 points. The new index record has already become the eighteenth in a row this year. The Dow Jones Industrial Average also rose 0.1% to 33446.26 points. At the same time, the Nasdaq Composite slipped by 0.1%, to the level of 13688.84 points. Throughout most of the trading day, the leading indices were balancing between barely perceptible gains and falls amid a lack of significant catalysts, but towards the end of the session, the S&P 500 and Dow Jones were still able to set a course for an increase and closed the day with a plus. The main reason for the growth was the minutes of the March meeting published by the US Federal Reserve System. According to the released data, the Central Bank considers the currently available leading indication of interest rates to have a positive effect on the economy of the United States. As a result, in March, the Federal Reserve System left interest rates unchanged (near zero) and continued to buy government and mortgage bonds in the amount of $ 120 billion monthly. At the same time, most of the stock market participants did not expect new fateful decisions in the minutes, especially against the background of early public statements by the Fed leaders about the intention of the Central Bank to adhere to the existing monetary policy measures for as long as necessary. However, some investors still lived in the hope that the Central Bank would hint at the presence of disagreements among the representatives of the organization regarding the near future. The aspirations of traders collapsed completely after the statement of the Fed leaders that they do not see the threat of an excessive acceleration of inflation in the short term. In the current year, concerns about inflation have repeatedly caused tangible shocks in the US stock markets. More than once, investors have worried that strong growth in the US economy, coupled with government fiscal stimulus policies, would force the Federal Reserve to roll back monetary support ahead of schedule. Analysts say this will happen a little later due to strong growth in employment for several months in a row. Signs of permanent economic growth since the beginning of 2021 have caused mixed reactions from stock market participants. On the one hand, investors rejoiced at the strengthening of economic indicators confirming the recovery from the coronavirus pandemic, on the other hand, they feared a tightening of monetary policy. So, last Monday, the leading indices of the S&P 500 and DJIA reported record marks on the background of the labor market report showing that US employers created 916,000 jobs in March. If we talk about general sentiment, then the second quarter of the US stock markets began with a tangible positive, which led to an increase in the scale of the rally. For example, according to the results of trading on Wednesday, the securities of many companies – from to Carnival and Hess – increased by 1.4% and more, L Brands shares soared by 3.6%, and Twitter quotes – by 3.0%. … The yield on ten-year US government bonds has returned to normal over the coming week after a frightening jump at the beginning of the year. The day before, this indicator fell to 1.653% from 1.656% on Tuesday and reported for the third day in a row. Thus, falling debt yields provide a respite from the endless rally for tech stocks, which have come under pressure from rising borrowing costs. At the same time, many market participants are of the opinion that after returning to their usual economic activity, sectors closely tied to the state of the economy, including the banking and oil and gas sectors, will benefit most of all. Meanwhile, the main indicators of the Asian stock markets show mixed directions and uncertainty. The Nikkei 225 Index gained 0.1%, the Hang Seng Index sank 0.9% and the Shanghai Composite Index lost 0.1%. The pan-European Stoxx Europe 600 was down 0.2%. The Cboe Volatility Index, which is based on the S&P 500 options trading indices, lost 5.30% to 17.16 points. The US Dollar Index Futures gained 0.09% to trade at 92.430. – Source: InstaForex

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