By Chuck Mikolajczak
NEW YORK (Reuters) – It closed the week with slight gains on Thursday, with the benchmark index posting its strongest first quarter in five years, as investors digested the latest batch of economic data while looking ahead to the next inflation reading.
Each of the three major US indices posted strong quarterly gains, led by a 10.16% rise for the S&P 500, helped by optimism over artificial intelligence (ai)-related stocks and expectations that the Federal Reserve The United States will begin cutting interest rates this year.
The Dow Jones is less than 1% away from surpassing the 40,000 level for the first time.
Data on Thursday showed the U.S. economy grew faster than previously estimated in the fourth quarter, partly due to strong consumer spending, while a separate report showed initial jobless claims indicated the labor market is holding up. on a solid foundation.
“The economy is in pretty good shape, the consumer is in pretty good shape and still spending, unemployment is still low and there are still areas where the economy is thriving… So there is money that wants to be spent in different ways,” said George Young, portfolio manager at Villere & Company in New Orleans.
“And then there's that carrot that the Fed says, 'We may just be going down and maybe we're just going down,' and everyone is trying to parse their words.”
While U.S. stock markets will be closed for the Good Friday holiday, attention will be focused on the release of the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred inflation gauge, for clues on the timing and size of rate cuts this year from the central bank.
The S&P 500 gained 5.86 points, or 0.11%, to 5,254.35 and lost 20.06 points, or 0.12%, to 16,379.46.
For the week, the Dow Jones rose 0.84%, the S&P 500 advanced 0.39%, and the Nasdaq fell 0.3%. In March, the Dow Jones rose 2.08%, the S&P gained 3.1%, and the Nasdaq added 1.79%. For the quarter, the Dow Jones gained 5.62%, the S&P 500 soared 10.16%, and the Nasdaq rallied 9.11%.
Overnight, Federal Reserve Governor Christopher Waller said recent disappointing inflation data confirms the central bank should postpone cutting its short-term interest rate target, but did not rule out cutting rates further. later in the year.
Markets are pricing in a roughly 64% chance that the Federal Reserve will cut rates by at least 25 basis points (bps) in June, according to CME's FedWatch tool.
While communications services, energy and technology performed the best of the 11 major sectors this quarter, only the real estate sector suffered a decline.
Shares of Walgreens Boots (NASDAQ rose 3.19% after its quarterly earnings in which it recorded an impairment charge on its investment in clinic operator VillageMD.
House deposit (NYSE:) fell 0.59% after the home improvement retailer said it would buy building materials supplier SRS Distribution in an $18.25 billion deal in its largest acquisition.
Issues that rose exceeded those that fell by a ratio of 1.87 to 1 on the New York Stock Exchange. On the Nasdaq, rising stocks outnumbered falling ones by a ratio of 1.42 to 1.
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The S&P 500 recorded 91 new 52-week highs and no new lows, while the Nasdaq recorded 275 new highs and 52 new lows.
Volume on US exchanges was 11.17 billion shares, compared to the average of 12.07 billion for the entire session over the last 20 trading days.
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