The U.S. stock market ended sharply higher after a volatile session on Friday, and Wall Street’s three main indexes advanced as investors bet on a recovery that is expected to deliver the fastest economic growth since 1984. Investors stayed focus on stocks that could benefit from a growing economy after the Federal Reserve raised its GDP estimate for 2021 to 6.5% from 4.2%.
The Dow Jones Industrial Average and S&P 500 also advanced on a weekly basis, while the Nasdaq Composite posted its second weekly decline in a row. The positive news is that the weekly jobless claims showed improvement, but rising treasury yields continue to spook investors, prompting worries they could put a dent in the economic recovery.
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The Federal Reserve may not worry about the possibility of higher inflation, but Americans are already growing more concerned about the risk of higher prices.
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“There is some concern out there certainly that consumers see now. They see the price of oil rise, the cost of goods is going up faster than the cost of services, and there’s a lot of inflation in the system,” said BMO Wealth Management chief investment strategist Yung-Yu Ma.
Newly reported COVID-19 cases are back on the rise, and worries over a third pandemic wave could add pressure on the financial markets. The total number of U.S. cases since the pandemic began topped 30 million last week, and there is still a long way to fight against this pandemic.
Coronavirus concerns were ignored by traders last week and according to analysts, Wall Street’s three main indexes’ upside potential remains limited for now.
S&P 500 up 1.6% on a weekly basis
For the week, S&P 500 (SPX) booked a 1.6% increase and closed at 3,974 points.
If the price jumps above 4,000 resistance, it would confirm a “bullish” trend for the S&P 500, but if the price falls below 3,800 points, it would be a strong “sell” signal, and we have the open way to 3,700 points.
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DJIA up 1.4% on a weekly basis
The Dow Jones Industrial Average (DJIA) advanced 1.4% for the week and closed at 33,072 points.
The Dow Jones Industrial Average continues to trade in a buy zone, but if the price falls below 32,000 points, the next target could be around 31,000 points.
Nasdaq Composite down -0.6% on a weekly basis
The Nasdaq Composite (COMP) has lost 0.6% on a weekly basis and closed at 13,138 points.
Nasdaq Composite continues to trade above 13,000 points, but the risk of further declines is still not over. If the price falls again below 12,500 points, the next target could be around 12,000 points or even below.
Summary
The U.S. stock market ended sharply higher after a volatile session on Friday, and Wall Street’s three main indexes advanced as investors bet on a recovery that is expected to deliver the fastest economic growth since 1984. Coronavirus concerns were ignored by traders last week, and according to analysts, Wall Street’s three main indexes’ upside potential remains limited for now.
