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16 Sep 2021
2 min read

US Stocks Rally, S&P500 Logs Best Day in Two Weeks

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Key Takeaways

  • Stocks rise broadly with S&P500 notching its best single-day performance in two weeks
  • Investors hope the rosy outlook could be sustained as jobless claims data is set for today

Stocks Rally as Investors Stage a Rebound After Pullback

Stocks on Wall Street advanced significantly on Wednesday following a string of declines for the three major US stock averages. Investors rushed to buy into depreciated shares across all sectors as they staged a broad-based rebound.

The Dow Jones Industrial Average gained 236.82 points, or 0.68%, to finish the session at 34,814.39. The technology-driven Nasdaq Composite jumped 123.77 points, or 0.82%, to settle at 15,161.53.

The S&P500 added 37.65 points, or 0.85%, to close at 4,480.70 in its best trading session in two weeks. The broad-based index pared some of the losses accumulated over the past week as it had fallen in six of the previous seven trading sessions. In early September, the S&P500 notched its all-time high and now floats about 1.2% below it.

Hopes for a Rosy Outlook Remain

Stocks have pulled back this month as concerns about a downshift in the economic recovery have resurfaced. A number of challenges threaten to undermine the continued upside momentum inequities. Investors are shifting their worries from the Federal Reserve’s plan to reduce the monetary support, to a slowdown in the economic rebound caused by the Delta virus and supply-chain difficulties in China.

Yesterday’s rally, however, has fueled hopes the strong growth that lifted stocks over the past six months is bound to re-accelerate. In signs of stabilizing the sentiment that waned over the last few days, fresh Fed data showed US industrial production rose 0.4% in August from a month ago.

European Markets Waver

Across the Atlantic, European markets closed the session on Wednesday with declines. The Stoxx Europe 600 slipped 0.8%, dragged lower by a fall in utilities and luxury stocks.

Spain’s IBEX35 tumbled 1.65% after Spain’s government passed emergency measures that aimed to reduce skyrocketing energy bills. The new rules would redirect billions in profits from energy companies to consumers. The utility sector dropped 2.9%.

European bourses traded fairly flat to positive in the early hours of Thursday’s session.

Oil Jumps, Gold Declines as Investors Rotate

In other markets, oil extended its gains on Wednesday and early Thursday. Brent crude, the international energy benchmark, climbed 2.5% yesterday to settle at $75.46 per barrel. Gold is falling for a second straight day on Thursday as investors are rotating to risky assets such as stocks. The precious metal slipped about $10 yesterday to close at $1,794 per troy ounce.

Bitcoin Rises Despite Ray Dalio’s Warning

Cryptocurrencies gain traction early Thursday, building on a rally that has been gathering steam since Monday. The price of bitcoin today reached a session high of $48,500 and is on pace to log a fourth day in the green. Late on Wednesday, Ray Dalio, billionaire and founder of Bridgewater Associates, the largest hedge fund in the world, issued a dire warning that if bitcoin became too successful, regulators would try to “kill it”. Mr. Dalio’s comments, however, could not dent the rising price of bitcoin.

What to Watch for Today

Looking ahead into the day, investors will be monitoring the latest retail sales and jobless claims data. Both economic reports could present trading opportunities in the volatile US dollar, as well as gold. Stock futures today hover moderately in negative territory.

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