U.S. Stock Markets Surge on Dovish Comments from Fed and ECB
The U.S. stock markets experienced a significant surge on Thursday, with all three major indexes ending in positive territory. The momentum was regained after dovish comments from the Federal Reserve Chairman Jerome Powell and the European Central Bank President Christine Lagarde regarding potential reductions in benchmark interest rates.
The Dow Jones Industrial Average (DJI) increased by 0.3% or 130.30 points to close at 38,791.35. Intel Corp. (INTC) was the major gainer of the blue-chip index, with its stock price surging by 3.7%.
The tech-heavy Nasdaq Composite finished at 16,273.38, rising by 1.5% or 241.83 points, due to strong performances by technology giants. The index even posted a new all-time high during intraday trading.
The S&P 500 also saw a 1% increase, closing at 5,157.36, marking a new closing high. Nine out of 11 sectors of the index ended in positive territory, with the Materials Select Sector SPDR, Communication Services Select Sector SPDR, and Technology Select Sector SPDR all advancing.
The fear-gauge CBOE Volatility Index (VIX) was down, indicating increased confidence in the market. Trading volume was higher than the 20-session average, with advancers outnumbering decliners on both the NYSE and Nasdaq.
The dovish attitude of the Fed and ECB played a significant role in boosting market confidence. Powell hinted at potential interest rate cuts if inflation moves in line with expectations, while Lagarde indicated a possible rate cut in the upcoming ECB meeting.
In economic news, initial jobless claims remained unchanged, while the U.S. trade deficit for goods and services in January was higher than expected.
Overall, the positive market sentiment was driven by the reassurance from central bank officials and strong performances by key sectors. Investors are optimistic about the future outlook of the markets, especially with the potential for infrastructure spending on the horizon.
