Despite some mixed performances among individual stocks, the US stock market closed higher on March 7, 2024. The Dow Jones Industrial Average closed slightly higher, up 0.2% to 38661.05 – 14 of its components closed lower, and 16 closed higher.
A significant gain in technology stocks sent the Nasdaq up 0.6 percent to 16,031.54, as did optimism about the upcoming Fed decision. The S&P 500, a more broadly based indicator of the market’s direction, rose 0.5 percent to 5,104.76, helped by big gains in sectors such as Utilities, Consumer Staples, and Technology.
Despite an increase of 0.3 percent in the CBOE Volatility Index, which closed at 14.50 today, investor sentiment appears to remain largely upbeat, indicating that people are still confident in the robustness of the market and thus continue investing with guarded optimism in these times of uncertainty.
Key Factors Driving Market Sentiment:
Powell’s Congressional Testimony: In testimony to Congress, the Federal Reserve’s chairman, Jerome Powell, made clear to market participants that the Fed looked unlikely to cut interest rates for the second time this year before the end of the year, even though it wants to do more than that.
Strong Earnings Results: Chemical makers and other companies reported better-than-expected results, boosting investor confidence. Shares of Campbell Soup Co. (CPB), Korn/Ferry (KFY), and V2X Inc. (VVX) moved upward as the three companies beat earnings estimates. Also, analysts noted that Korn/Ferry has been given a Zacks #1 Rank (Strong Buy) due to its position in the top half of the Zacks Rank.
Economic Data: The Job Openings and Labor Turnover Survey (JOLTS) showed a mixed story, as job openings rose slightly but fell short of the consensus estimate for an expected increase of 220,000. In addition, private payrolls, as reported by Automatic Data Processing, Inc., also missed expectations at 179,000 when 197,000 was expected.
Outlook:
Despite heightened economic uncertainty surrounding a Federal Reserve that continues to raise interest rates, the stock market displayed resilience with robust earnings reports and with Powell’s testimony helping soothe investors’ concerns over global growth. As long as investors continue to monitor the US economic data releases and geopolitical developments, maintaining a diversified investment approach will be an effective way of dealing with market fluctuations.
Source: Zacks Equity Research, Zacks March 7, 2024
