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S&P500 Steady Near Record High as Yields Rise Again

US stock indexes floated near flat on Wednesday, S&P500 ekes out a record. On Thursday, strongly positive results with Nasdaq futures in the lead.

SageFX - Apr, 08, 21

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Principal Points

  • US stock indexes floated near flat levels on Wednesday, S&P500 ekes out a record
  • Futures on Thursday strongly positive with Nasdaq futures in the lead

The S&P500 edged higher on a quiet trading session Wednesday. The moderate climb was enough for the broad-based stock gauge to set a new all-time high. The S&P500 closed higher by 0.15%, or 6.01 points, to end the session at a record 4,079.95. The other two benchmark indexes mostly hovered near their previous levels. The Dow Jones Industrial Average moved 0.05% to the upside, or 16.02 points, to a close of 33,446.26. The Nasdaq Composite slipped from its flat level and closed 0.07% to the downside, or 9.54 points, finishing at 13,688.84.

The record level for the S&P500 came after investors supported the ongoing buying momentum in an otherwise uneventful day during which major indexes were struggling to find direction.

The S&P500 was able to continue its upward momentum following the release of the Federal Reserve’s minutes from the latest FOMC meeting in mid-March. According to the meeting summary, the central bank remains committed to its accommodative easy money policy until Fed’s goals are achieved, which include maximum employment and stable prices.

Investors were not expecting any changes in Fed’s approach to the economy. The document showed that the committee believes the current monetary policy, the guidance fo

Broad Success for US Vaccination Campaign

The recent climb in the stock market indexes serves as evidence that investors and Fed officials are aligned when it comes to inflation expectations. After multiple reiterations that the Fed sees inflation under control and “broadly balanced”, the market seems to have eased its concerns that the rapid economic growth, coupled with large government spending, could lead to higher prices. Moreover, a spike in inflation could prompt the Federal Reserve to unwind its easy money policy to prevent the economy from overheating. On that issue, Fed policymakers have vowed to continue their programs “until substantial further progress is made.”

Recent weeks have brought a consistent stream of positive economic data. The vaccination campaign across the US remains highly fruitful with an average of 2.5 million doses administered per day for the last week. One-third of the US population has received at least one dose of a coronavirus vaccine and a total of nearly 172mn vaccines have been administered so far. President Biden and his administration forecast that the vaccination rate should rise to 75% of the population by the summer. Other encouraging news includes the recent upsurge in hiring for March. While unemployment fell, the US added 916,000 new jobs to the labor market.

Against the backdrop of improving economic conditions, Fed officials do not see an increased risk of a sharp rise in inflation. Rather, the committee expects inflation to remain under the Fed’s inflation target of 2%.

On Thursday, US futures are staging a leap as soon as the session kicks into gear. Futures contracts tied to the tech-heavy Nasdaq Composite are higher by over 0.60%. S&P futures indicate a higher open by 0.25%, while Dow futures are positive by roughly 0.10%.