The Dow Jones Industrial Average also posted a respectable 5.5% gain in the first quarter, which analysts welcomed as a sign that the current rally is not entirely dependent on Big Tech. I took it as a sign of what was to come.
Analysts say the market’s surge is due to the economy continuing to do well and consumers continuing to open their wallets.
“The Dow Jones Industrial Average is on track to hit new all-time highs, supported by strong economic conditions, a strong labor market and resilient consumer spending,” said Quincy Crosby, chief global strategist at LPL Financial. said.
The Dow ended Thursday at $39,807, up 0.1% for the day and setting a record. The S&P 500 rose 0.1% on the day to close at 5,254, while the tech-heavy Nasdaq fell 0.1% to close at 16,379.
A strong quarter for all three indexes also extended their gains in the final months of 2023, when executives at the big tech stocks known as the Magnificent Seven pushed the market higher. The companies that benefited from the hype about advances in artificial intelligence, particularly Microsoft and Nvidia, surprised Wall Street the most.
However, the market performance up to 2024 has also increased. The Dow includes 30 large companies listed on US stock exchanges (so-called blue-chip companies such as Apple, Boeing, Nike, and Walmart), and is attracting attention as a leader in predicting stock market trends. There is.
The exclusion of some of the Magnificent Seven has led some analysts to believe that the index is a better representation of the U.S. economy itself, or what Crosby calls “the popularity index of Main Street America.” I believe that
Analysts said the Dow’s strength suggests the current stock rally may be sustained.
Michael Farr of Farr, Miller & Washington, a Washington, D.C.-based investment firm, said the Dow’s success “is a sign of the prosperity and economic expansion of this country.”
Farr said one factor in the Dow’s strong performance was gains in companies tied to the financial sector, which accounted for nearly half of the quarter’s gains. American Express and insurance company Travelers have both risen about 20% since the beginning of the year. Goldman Sachs rose more than 7%. JPMorgan ended the quarter up about 16%.
Mission Square Retirement’s Wayne Wicker said the rise in the financial sector was primarily supported by the fact that consumer spending is performing better than expected.
“The resilience of the economy this year has been a surprise to investors. … The economy remains vibrant and consumer spending continues to move forward,” Wicker said.
Looking ahead, investors will also be paying attention to trends in interest rates. The Fed will keep interest rates at their current high levels until there is further evidence of falling inflation. However, the central bank is expected to cut interest rates three times in 2024.
