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- US indexes rallied on Friday, with chip makers leading the way.
- Investors are turning to tech shares to shake off concerns about Fed rate hikes.
- US Dollar, US equities, and Treasury yields saw a surge, causing markets to become volatile.
The Standard & Poor’s surged to a new all-time high of $4,839.58 on Friday as equities broadly rallied due to increased investment in future earnings on large-cap tech stocks. Chip-makers, loosely related to AI tech projects, were at the forefront of this upward trend.
After months of hesitant expectations for rate cuts from the Federal Reserve, money markets are now showing resilience. The CME’s FedWatch tool indicates a nearly 40% chance of a rate cut at the Fed’s March policy meeting, a significant reduction from over 70% just a month ago.
Fed officials have been cautioning against increased rate cuts, and the recent strong US economic data is validating that message. US economic data has consistently exceeded market forecasts, and US consumers are more optimistic, as seen in the latest data from the University of Michigan’s consumer sentiment survey.
With the US economy continuing to grow and consumer inflation expectations remaining solid, it is unlikely that market hopes for Fed rate cuts will materialize. Money markets are now focusing on the FOMC’s May meeting as a possibility for the next cutting cycle to commence.
The Dow Jones Industrial Average (DJIA) also achieved an all-time high, closing the day at $37,863.80, up 1.05% with a gain of over 395 points.
Both the NASDAQ Composite and NASDAQ 100 indexes reached new peaks on Friday, demonstrating the strong performance of the tech sector.
S&P 500 Technical Outlook
The S&P 500 major equity index reached a new all-time high, ending the day at $4,839.81, an increase of 58.87 points on the day.
Near-term bullish momentum is propelling the S&P to record levels. The index could experience an 8% decline and still be considered bullish, showing the strength of the market.
S&P 500 Hourly Chart
S&P 500 Daily Chart
Important note: The information contained here includes potential risks. The data provided is for informational purposes only and should not be taken as a recommendation to trade.