As investors concluded an incredible month for equities and saw signs of relaxing Federal Reserve monetary policy in the form of declining inflation statistics, the Dow Jones Industrial Average ended at its highest level since January 2022.
The Dow exceeded expectations by a wide margin, helped by a strong lift from Salesforce following its consensus-beating
The Nasdaq entered negative territory as momentum companies in tech and tech-related areas, headed by Nvidia, caused the S&P 500 to close slightly higher.
Nevertheless, it was the greatest monthly percentage rise for the S&P 500 and the Nasdaq since July 2022. Since October 2022, November has been the Dow’s strongest month in terms of percentage gains.
“We’re capping off an incredible month,” stated Ryan Detrick, chief market strategist at Omaha’s Carson Group. “It’s a nice reminder for investors how worried everyone was a month ago, and we just finished one of the best months in history for stocks.”
The Commerce Department’s highly watched Personal Consumption Expenditures (PCE) report, which included data released on Thursday, indicated that consumer spending and inflation are both declining as predicted. The information confirmed predictions that the Fed’s cycle of rate hikes is over.
John Williams, the president of the New York Fed, reaffirmed the central bank’s commitment to continuing to rely on data, but he did not completely rule out the prospect of more rate increases in the event that inflation does not continue to decline.
Much of this month’s surge began with the realisation that inflation is rapidly returning to earth. Core PCE data released today suggests that inflation is no longer a significant impediment, according to Detrick.
In December’s policy meeting, there is a 95.8% chance that the central bank would maintain its key Fed funds target rate between 5.25% and 5.50%, as priced in by the financial markets.
“There’s likely no rate hikes any time soon, the next move will likely be a cut, probably in the middle of next year,” Detrick stated. “The massive drop in (Treasury) yields this month is the bond market’s way of saying it thinks the Fed is indeed done raising rates.”
Powell will take part in two different talks on Friday at 11 a.m. and 2 p.m. Eastern Time.
The S&P 500 gained 17.22 points, or 0.38%, to 4,567.8, the Dow Jones Industrial Average increased 520.47 points, or 1.47%, to 35,950.89, and the Nasdaq Composite decreased 32.27 points, or 0.23%, to 14,226.22.
Healthcare equities did better than those of the other 11 major S&P 500 sectors, while the largest percentage fall was seen in the communication services sector.
On the NYSE, advancing issues exceeded declining ones by a ratio of 1.62-to-1; on Nasdaq, the ratio was 1.01-to-1 in favour of decliners.
The Nasdaq Composite had 75 new highs and 109 new lows, while the S&P 500 recorded 37 new 52-week highs and two new lows.
13.22 billion shares were traded on US exchanges for the whole day, which is more than the 10.55 billion average over the previous 20 trading days.