Wall Street has been on a wild ride this year as stock markets have been volatile. On Monday, Wall Street finished the topsy-turvy day higher, ending a run of losses for the S&P 500.
The market turbulence has been driven by uncertainty over what the US Federal Reserve will do with interest rates in the future. Investors are closely watching for any hawkish comments from policymakers that may impact the markets.
What caused the stock maraket volatility?
U.S. markets this year have been tumultuous. Markets tumbled in February after a surging January. Investors are seeking to determine what the Fed will do with interest rates.
Hawkish comments from policymakers have been driving market volatility, which resulted in Wall Street finishing a topsy-turvy day higher on Thursday. Adding to the market jitters was an unexpected rise in Americans filing new claims for unemployment benefits last week.
However, a separate report confirmed the economy grew solidly in the fourth quarter, with the U.S. gross domestic product increasing by 2.7%, while consumer spending and business investment also showed positive signs.
This could be a sign that the economy is beginning to pick up steam and that the Fed may not raise interest rates as quickly as anticipated, which could help alleviate some of the market volatility.
The S&P 500 Index ended 0.3% higher at 3,569.35, snapping a three-day losing streak. The Nasdaq Composite finished flat at 11,924.
On the employment front, 965,000 Americans filed new claims for unemployment benefits last week, slightly below expectations but still historically high.
A separate report confirmed the economy grew solidly in the fourth quarter, with the U.S. gross domestic product increasing 2.7%. Consumer spending increased 1.4% and business investment rose 8%.
Despite the uncertain economic outlook due to coronavirus pandemic, these figures suggest the US economy is heading towards recovery which should boost investor confidence going forward.
Wall Street finishes a topsy-turvy day higher
Stock markets around the world have been volatile this year, with the U.S. market seeing a pullback in February after a strong January as investors tried to figure out what the U.S. Federal Reserve would do with interest rates.
Hawkish comments from policymakers have been met with investor caution, creating a topsy-turvy day on Wall Street on Thursday. However, despite the uncertainty and volatility, stocks closed higher as the S&P 500 snapped a three-day losing streak.
A separate report confirmed the economy grew solidly in the fourth quarter, with U.S. gross domestic product increasing 2.7% over that period.
Americans filing new claims for unemployment benefits also dropped to the lowest level since 1969, pointing to an improving labor market.
While these figures provided some relief to investors, market participants will continue to watch the Fed’s next move closely, as rising inflation could trigger further rate hikes. Further clarity on the matter is expected when the central bank meets later this month.
Investors should take solace knowing that despite the ongoing uncertainty surrounding interest rates, joblessness remains low, with Americans filing new claims for unemployment benefits dropping to the lowest level since 1969.
This suggests that American consumers are still spending money, which is good news for the US economy overall.
Finally, the GDP growth of 2.7% seen in the fourth quarter of 2018 indicates that businesses are investing more heavily into production, which has enabled the U.S. stock market to snap its recent losing run and finish Thursday’s session higher.
Americans filing new claims for unemployment benefits
The U.S. stock market ended a topsy-turvy day higher on Thursday, with the S&P 500 snapping its two-day losing streak.
Adding to the market’s positive sentiment was news that Americans filing new claims for unemployment benefits fell last week, according to Labor Department figures.
This suggests that the labor market remains strong despite recent economic data. A separate report confirmed the economy grew solidly in the fourth quarter, with the U.S. gross domestic product increasing 2.7% in the fourth quarter of 2018.
This was slightly lower than initially estimated, but still shows a healthy economic outlook for the U.S. as we enter 2019. Investors took this data into account and moved stocks higher, with the S&P 500 ending the day 0.6% higher after seeing a decline earlier in the session.
Other indices were also higher on the day, including the Nasdaq Composite which finished up 1.1%, while the Dow Jones Industrial Average rose 0.4%.
Despite this rebound, investors remain cautious about what will happen next due to ongoing trade tensions between the U.S. and China.
With no resolution in sight, markets may continue to remain volatile throughout the first quarter of 2019. Additionally, some investors are also concerned about how Federal Reserve rate hikes could impact growth going forward.
As a result, it is important for investors to stay informed and make decisions based on their own risk tolerance and financial goals.
U.S. gross domestic product increased by 2.7% in the fourth quarter
A separate report confirmed the economy grew solidly in the fourth quarter, as U.S. gross domestic product increased by 2.7%. This growth was largely driven by an increase in consumer spending and investment, which more than offset the effects of a mild pullback in business spending.
While Americans filing new claims for unemployment benefits rose modestly, it wasn’t enough to offset the growth seen elsewhere in the economy.
This news comes as Wall Street has been on a rollercoaster ride this year, with the S&P 500 snapping its five-day losing streak yesterday.
With strong economic growth in the fourth quarter and increased consumer confidence, it appears that investors are still feeling good about the outlook for 2019.
Additionally, with the Federal Reserve reiterating that they will be patient when raising interest rates, stock markets have started to see some stability.
The S&P 500’s rebound came despite some mixed results from the jobs market, with data showing that Americans filed new claims for unemployment benefits rose modestly last week.
But overall, despite some volatility, investor sentiment is still bullish due to a generally positive outlook for the U.S. economy.
This is evidenced by a separate report confirming the economy’s solid growth in the fourth quarter, where GDP increased by 2.7% due to an uptick in consumer spending and investment.
Ultimately, these numbers bode well for Wall Street, as traders remain optimistic about how stock markets will fare in the coming months ahead.