Stock markets in the United States have been very interesting over recent years. However, it has not just been a case of following the volatile tech stocks on the NASDAQ, as the more traditional companies that are included in the S&P 500 can also make waves.
This week, the S&P 500 index has experienced a very sudden change in fortunes, showing a noticeably different pattern compared to its very strong growth that has been consistent since November 2023.
At FXOpen, the S&P 500 index stood at 4,119 points on October 27 before beginning a substantial rally in which it increased over several weeks before touching 4,780 points on January 1 this year.
Such a strong rally showed consistent growth among the most prestigious large-cap companies on the American stock markets, demonstrating remarkable progress in the growth of the US economy overall; however, whilst the country itself may be back on track, there is one extremely high-profile aspect that has begun to dampen the progress made since November with regard to the S&P 500 index.
This week, in the aftermath of the incident, which took place in Portland, Oregon, in which a Boeing 737-9 MAX aircraft had made an emergency landing after a section of its fuselage disconnected from the aircraft mid-flight, there have been severe repercussions for its manufacturer.
Seattle-based Boeing Company, which is one of the world's largest civilian aircraft manufacturers, is a key component of the S&P 500 index, and its share price has been affected by this incident, which builds further on a previous issue in which a similar model of aircraft, a Boeing 737-8 MAX operated by Ethiopian Airlines crashed due to an innate design fault in 2019 killing 157 people with an ongoing litigation having cost Boeing approximately $20 billion so far.
This latest incident has caused Boeing stock to dive, and this week, the S&P 500's previously unstoppable rally ended, taking the value down to 4,694 on January 4 at FXOpen.
What is interesting is that despite the talk across most mainstream media channels today that Boeing's share prices continue to be adversely affected by this debacle, the S&P 500 index has made a strong recovery from this dip, rising from 4,704 points on January 8 to 4,757 points at the close of the US trading session yesterday at FXOpen.
It still has a way to go before resuming the strong upward direction experienced over the last two months of 2023, but given that Boeing's news is big news, it is interesting to see a rebound in the value of the overall S&P 500 index as this week progresses.
In cases such as this, the focus has been on a serious matter that affects just one component of the index, and whilst that component continues to affect overall performance, the rebound is a testimony to the commercial strength of the other contingents.
Overall economic conditions are beginning to improve with optimism growing with regard to potential interest rate cuts, which would make the monthly operational costs lower for the type of large corporations that are included in premium indexes such as the S&P 500; hence, a wider view may be taken.
Volatility is here, however, and the Boeing situation is still in its infancy. As the investigations continue, the index may vary in value even more.
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