Wall Street Smashes Records Ahead Of Heavy Corporate Earnings

Stocks moved higher Monday in the United States and Europe, with both the Dow and the S&P 500 hitting new record highs on growing optimism for the American economy

New York, (UrduPoint / Pakistan Point News - 23rd Jan, 2024) Stocks moved higher Monday in the United States and Europe, with both the Dow and the S&P 500 hitting new record highs on growing optimism for the American economy.

Expectations that the Federal Reserve will not be cutting interest rates as soon as many investors hoped failed to dent the upbeat mood ahead of a heavy week of US corporate earnings.

Among businesses reporting financial results this week are United Airlines after the closing bell on Monday, and other prominent names like Procter & Gamble, Tesla and Netflix.

Investors are also monitoring data on fourth-quarter US economic growth, due Thursday, which could offer clues on when the Fed might start lowering rates.

"Optimism is back, more and more investors think the downward trend for stocks is over," said Pierre Veyret, an analyst at ActivTrades.

On Monday, both the Dow and S&P 500 logged fresh records with the Dow trading above the 38,000 level for the first time and the S&P adding to last week's record close.

"We have a lot of earnings beginning tomorrow, and so enthusiasm is building," said Peter Cardillo of Spartan Capital.

Chris Beauchamp, chief market analyst at trading platform IG, added: "Stocks have once again defied the doubters by moving higher, after their brief outbreak of worry about the path of interest rates in the US and elsewhere."

While the European Central Bank is unlikely to cut rates at its policy meeting on Thursday, all eyes will be on president Christine Lagarde after she said last week that rate cuts could be coming this summer.

In the United States, a string of data in recent weeks has shown inflation remains sticky and well above the bank's two percent target, while the jobs market continues to show resilience despite borrowing costs sitting at two-decade highs.

Minutes from the Fed's most recent meeting also showed decision-makers were happy to keep monetary policy tight until they are confident prices are under control.

The chances of a reduction before the end of the first quarter has fallen to less than 50 percent, according to the CME FedWatch tool.