Dow On The Rise After Best Day Since March Gaining Over 580+ Points

Wall Street Sign Shown From: The Boston Globe

U.S. stocks rallied on Monday as the market recovered a bit after a tough past few weeks. The reason for the dip in stocks over the past few months was due to the Federal Reserve policy shift which caused the Dow and other indexes to fall. The worry is arising from Federal officials signalling that interest rates may increase sooner than expected due to the fast recovering economy. Investors tend to be fairly optimistic about this as they believe that faster growth and inflation over the next few months will be good for the market even if it means that long-term rates were to rise moderately.

The Dow jumped 586.89 points or close to 1.8% which is the best the Dow has performed since the beginning of March. This rebound is looking like good news just as the Dow just recently had its worst week in the market since October. The S&P 500 is also looking promising going up 1.4% to $4224 which is just 1% from its record high and with all 11 sectors of the S&P 500 rising on Monday it is looking promising for the coming months. The Nasdaq on the other hand did however still have quite a gain but underperformed its counterparts only gaining 0.8% up to $14,141 with some of the big-name companies such as Amazon and Tesla ending the week on losses. Overall in the past week, the Dow fell about 3.5%, the S&P 500 dipped 1.9% and the Nasdaq fell 0.2% respectively.

Industrial and financial stocks, which are usually more sensitive to economic change were the leaders on Monday with fantastic gains. Morgan Stanley rose $1.85, or 2.2%, all the way to $85.95, Bank of America went up $0.97, or 2.5%, to $39.75. Boeing was also on the rise going to $7.93, or up 3.3%, to $245.28 and Caterpillar also did good numbers going up another $4.35, or 2.1%, up to $213.21. On the other side, while stocks shot up, government bond prices quickly fell as the yield on the 10-year U.S. Treasury note, which rises as bond prices fall, went up from 1.449% to 1.481% on Friday. This is big news as the 10-year yield has now dropped for five straight weeks through this past Friday, which makes it its longest stretch of losses since August of 2019.

While stocks climbed Monday, many investors are still a little skeptical and are keeping cautious because they are expecting more volatility on stocks over the next few months before they expect it to settle down. Investors are still fixated on changes to the market and the expected course of growth and rates of stocks. The U.S. market was resilient on Monday as there was a significant drop in Asian markets overnight and also a continuing decline in bitcoin. Japan’s Nikkei 225 fell almost 4% at one point on Monday with automakers Nissan and Honda leading the way closing 3.3% lower. Presently, bitcoin slipped more than 7% to $32,500 as China continued its repression of cryptocurrency mining regulations with the ongoing ban on Bitcoin that is still taking place.

Furthermore, the economy is still in a confusing state and it is still unclear what direction we are heading in. However, it is expected to see a lot of volatility over the summer across stocks and the endgame will be of interest to all investors. Will the economy continue to recover? Or is this just a temporary jump in the market? Stay tuned to find out! Follow Emerald Investment Analysts to stay up to date on all your financial news, and let us know what you think down in the comments!

Written by: Aneeshan Balakaran

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