S&P 500 Takes a Breather Following Impressive Rally: What's Next for the Market?
The S&P 500 Index slipped 0.15% after a four-day winning streak, likely indicating a small further decline in prices over the next few sessions.
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Posted 9/1/2023, 6:03:00 AM
investing.com
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After a strong surge in June and July, the S&P 500 index has experienced a significant decline in August, with tech stocks being hit particularly hard, as fears of rising interest rates and a slowdown in China weigh on the market.
The S&P 500 Index reached a high in July but has since experienced a pullback of -4.8% in the first three weeks of August, with further downside possible, although the market may be near a turning point.
The S&P 500 has fallen nearly 5% in August, and opinions on whether stocks will rebound are divided among Wall Street firms and market commentators, with some, like Goldman Sachs and Fundstrat, remaining optimistic while others, including Michael Burry and David Rosenberg, are bearish.
The Dow and S&P 500 ended slightly lower due to concerns about the Federal Reserve keeping interest rates higher for longer, while the Nasdaq finished barely in the green; the financial sector fell 0.9%, dragged down by an S&P downgrade of credit ratings of regional U.S. lenders, and investors are awaiting clarity on the rate outlook from Fed Chair Jerome Powell.
The stock market experienced a sharp decline as early gains turned into a selloff, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all falling; concerns over rising bond yields and inflation contributed to the sell-off.
The S&P 500 has recovered 65% of last year's bear-market drop, but when adjusted for inflation it is only about 45%, highlighting the diminished buying power and implying implications for the economy and future Federal Reserve policy.
Last week in the stock market resembled a game of punchball, with alternating positive and negative days, but overall the S&P 500 showed a descent of less than 4% over four weeks.
Summary: Despite a dismal August for the stock market, the S&P 500 narrowly avoided a particular negative outcome, setting up for the next test.
The end of a five-month win streak for the S&P 500 is not all bad news, as historical data suggests that after five months of gains, the S&P 500's forward performances six and 12 months later are on average up 82% and 93% of the time, respectively.
The S&P 500 could experience significant gains in the coming months following the end of the current rate hike cycle by the Federal Reserve, with historical data showing positive returns after previous cycles and strong economic indicators supporting this trend. Investors are advised to consider investing in an S&P 500 index fund or industry-leading stocks like Amazon.
S&P 500 and Nasdaq futures slipped as investors awaited data on inflation and non-farm payrolls to determine the Federal Reserve's interest rate path, while HP and Rite Aid saw declines due to trimming profit outlook and a downgrade, respectively.
The S&P 500 index has seen impressive gains this year, up over 17%, and could potentially reach 5,000 points by the end of 2023, according to expert Andrew Slimmon of Morgan Stanley. Despite a slight pullback in August, strong third-quarter earnings and investor interest in mega-cap tech stocks are expected to drive the market forward.
S&P 500 futures remain flat after the index achieved its fourth consecutive positive day, and Salesforce reports better-than-expected earnings and guidance, causing its shares to rise.
The S&P 500 fell while the Nasdaq rose after U.S. inflation data met expectations, suggesting the Federal Reserve may pause its monetary tightening, while Salesforce shares climbed on a positive revenue forecast.
The S&P 500 Index experienced its best week since June, while Bitcoin faced a marginal loss due to the delay of spot Bitcoin exchange-traded fund applications by the Securities and Exchange Commission, although analysts remain optimistic about future ETF approvals.
U.S. stocks slipped as worrying data out of China and a spike in oil prices following the extension of Saudi Arabian production cuts weighed on the market. The Dow Jones Industrial Average fell 0.6%, while the S&P 500 lost 0.4% and the Nasdaq dipped 0.1%.
The S&P 500 index is unlikely to reach a record high by the end of 2023 due to factors such as earnings per share and financial conditions, according to Stifel's chief equity strategist.
The Dow Jones Industrial Average fell 0.6% as major indexes tested their 50-day lines, while the S&P 500 and Nasdaq both experienced declines midday.
Stock indexes decline as concerns about future rate hikes and sluggish market performance in September weigh on investor sentiment, with the tech-heavy Nasdaq Composite falling for the third consecutive day and the Dow Jones Industrial Average and S&P 500 on a two-day losing streak.
Microsoft Corp. shares slipped 0.20% as the stock market experienced a rough trading session, with the S&P 500 and Dow Jones Industrial Average also falling.
Stock futures were slipping Friday following three days of losses for the S&P 500 and four down days for the tech-heavy Nasdaq Composite.
Stocks are drifting on Wall Street, with the S&P 500 slightly higher but on track for its first losing week in three, as concerns over a too-warm economy and higher interest rates continue to weigh on the market.
Investors would have been better off buying the S&P 500 instead of adjusting their portfolios in response to Michael Burry's stock-market warning tweets, as the index had an average 6-month annualized gain of 34% following a selection of Burry's tweets from 2019 to 2023, according to Charlie Bilello, chief market strategist at Creative Planning.
Stocks plunged on Thursday and the S&P 500 suffered its worst day since March as increasing investor risk aversion and a surge in bond yields raised concerns about the US economy and impacted both stock and bond investors.