Topline
Adding to a slew of recent record highs, stocks climbed higher Tuesday after new consumer confidence data showed Americans are feeling the most optimistic about the economy since the beginning of last year—feeding investor optimism ahead of key economic reports due out in the coming days.
NEW YORK, NEW YORK – DECEMBER 19: Traders work on the floor of the New York Stock Exchange (NYSE) … [+]
Key Facts
The S&P 500 ticked up less than 0.1% to 4,292 points Tuesday, closing at a record high for the fourth-straight session, while the tech-heavy Nasdaq climbed 0.2% to 14,528 points, ending at a peak for the second day in a row.
Even the recently underperforming Dow Jones Industrial Average, which comprises a basket of legacy corporations like Goldman Sachs (up 1.1%), Nike (up 2.4%) and Walmart (down 0.6%), edged higher, coming within 1.4% of its early May record.
A slew of big banks and chipmakers headed up the market’s gains, with Morgan Stanley, Advanced Micro Devices, Qualcomm jumping 3.5%, 3% and 2%, respectively.
Reflecting the bullish sentiment, consumer confidence surged more than 7% in June, the fifth consecutive monthly increase and the highest level since March 2020, as more people say they plan to spend big in the next six months, according to Tuesday data from the Conference Board.
In another sign of market optimism, the price of bitcoin jumped 6% Tuesday afternoon to $36,200—the highest level in nearly two weeks.
What To Watch For
A slew of economic data and corporate earnings reports are due out in the coming weeks. The June jobs report is slated for release Friday, and the Federal Reserve will release minutes from its upcoming Federal Open Market Committee meeting next Wednesday. The following week, second-quarter earnings season gets started with results from Goldman Sachs, JP Morgan and PepsiCo on July 13.
Key Background
Though energy and financial stocks headed up much of the market at the start of this year, technology stocks are bouncing back after underperforming this spring amid accelerating economic growth and the threat of rising interest rates. Those fears spurred a stock market rotation away from growth stocks (like those in tech) to cyclical and value-leaning slices of the market that struggled during the pandemic (like energy and financials). In recent weeks, however, Federal Reserve officials have made it clear the Fed isn’t looking to hike interest rates anytime soon. The Dow, Nasdaq and S&P are up 13.5%, 14% and 15% this year, respectively.
Further Reading
People Are Feeling Better About The Economy Than Anytime Since March 2020, Consumer Survey Shows (Forbes)
