S&P 500 Completes Comeback, Comes Within a Hair of Record High

BUY CRYPTO CURRENCY

S&P 500 Completes Comeback, Comes Within a Hair of Record High
  • The S&P 500 Index came within 0.2% of its all-time closing high on Tuesday.
  • Wall Street’s benchmark index is up 51% from its March low.
  • The CBOE VIX is trading at five-and-a-half-month lows but doesn’t reflect record-high stock prices.

The Dow and broader U.S. stock market extended their rally on Tuesday, with the benchmark S&P 500 Index coming within a hair of its all-time high. A key measure of market volatility also fell to its lowest level in over five months.

S&P 500 Index Approaches New All-Time High

U.S. stocks traded mostly higher on Tuesday. The broad S&P 500 Index of large-cap stocks rose by as much as 0.5% to 3,378.84. In doing so, it came within 0.2% of the February 19 high.

Yahoo Finance

Gains were reported across most major S&P 500 sectors, with financials and energy leading the pack. Within the industrials sector, airlines rose more than 2%.

The Dow Jones Industrial Average also reported sizable gains, climbing by as much as 361 points. Meanwhile, the technology-focused Nasdaq Composite Index edged up 0.1%, reversing earlier losses.

Trading volumes have eased this month due to the summer vacation season. Low volumes are expected to persist until after Labor Day. September and October are typically much more volatile for U.S. equities.

Optimism Prevails–For Now

The S&P 500 is on track for its eighth consecutive gain, reflecting improved market sentiment around the economy. That optimism has been reflected in the CBOE VIX, which tracks expected volatility over the next 30 days.

On Tuesday, the VIX bottomed at 20.28, the lowest since February. The so-called “fear index” trades on a scale of 1-100, with 20 representing the historical average.

Yahoo Finance

The VIX is down around 75% from its March peak but remains elevated compared with past bull markets. (The last time the S&P 500 made all-time highs, the VIX was below 15.)

U.S. stocks are riding high on government stimulus hopes after President Trump signed executive orders to expand unemployment and other benefits.

At current levels, markets are pricing in another multi-trillion-dollar stimulus bill, according to Nicholas Brooks of Intermediate Capital Group.

In an interview with The Wall Street Journal, Brooks said:

Markets are assuming that ultimately Congress will come through with a package, and that there’s a lot of brinkmanship going on.

Video: What impact, if any, will Trump’s executive orders have?

President Trump issued executive orders on jobless benefits and other relief over the weekend, upping the pressure on Democrats to return to the negotiating table. Treasury Secretary Steven Mnuchin believes states could begin paying out additional federal jobless payments within two weeks.

Democrats in Congress are backing a $3.5 trillion stimulus bill, which is much higher than the one put forward by Republicans.

Josiah Wilmoth edited this article for CCN.com. If you see a breach of our Code of Ethics or find a factual, spelling, or grammar error, please contact us.

Last modified: August 11, 2020 3:39 PM UTC

Read More

ADS

Be the first to comment

Leave a Reply

Your email address will not be published.


*