The stock market saw modest gains on Monday, building upon the robust rally it experienced last week. The Nasdaq Composite, in particular, achieved its lengthiest positive streak since January, marking a significant milestone for the tech-heavy index.
Closing the day at 13,518.78, the Nasdaq surged by 0.3%. Meanwhile, the S&P 500 inched up 0.18%, settling at 4,365.98. The Dow Jones Industrial Average displayed a subtle increase, gaining 34.54 points, equivalent to 0.1%, and concluding at 34,095.86.
The market's current demeanour can be attributed to its endeavour to assimilate the substantial rally from the previous week. As it pauses to consolidate recent gains, investors eagerly await the emergence of the next bullish catalyst. This catalyst could potentially be influenced by the decisions of Federal Reserve policymakers, particularly Jerome Powell, or by the forthcoming corporate earnings season.
In a notable streak, the Nasdaq Composite logged seven consecutive days of gains, a feat unseen since January. In tandem, the Dow and S&P 500 secured their sixth consecutive day of growth, a remarkable achievement given that this had not occurred since July and June, respectively.
Investor sentiment was bolstered by a surge of optimism from Bank of America, propelling Nvidia's shares by approximately 1.7%. Conversely, Bumble faced a 4.4% dip in its shares following the announcement of its CEO's resignation scheduled for January. On the flip side, SolarEdge Technologies experienced a 5.1% decline after Wells Fargo issued a downgrade.
Yields, in contrast to last week's trend, displayed an upward trajectory, with the 10-year Treasury yield registering a 9-basis point increase, reaching approximately 4.653%.
The stock market's performance during the past week marked the strongest of 2023. The Dow secured its most substantial weekly gain since October 2022, while the S&P and Nasdaq both celebrated their most impressive weeks since November 2022. Contributing to this surge was a soft monthly jobs report that lowered bond yields, providing a boost to equities.
November has witnessed a robust start in the stock market, coinciding with the prevalent sentiment indicators. Although the surge in yields had prompted concerns, the hope remains that the impact on US equities may be limited.
The upcoming week is anticipated to bring a lull in economic data and company earnings releases.
However, seasonal tailwinds might serve as a driving force behind the stock market's recovery. November is renowned as the best-performing month for the S&P, according to the Stock Traders' Almanac. LPL Financial's Adam Turnquist noted that it also heralds the commencement of the market's most lucrative six-month return period since 1950. On average, the S&P has yielded a 7% return from November through April during this period.
While earnings season is winding down, investors are keenly awaiting updates from prominent companies like Walt Disney, Wynn, MGM Resorts, and Occidental Petroleum.
Furthermore, Federal Reserve Chair Jerome Powell is set to make two appearances in the coming days. Last week, the central bank chose to maintain the current interest rates for the second consecutive meeting, primarily in response to declining bond yields. Investors are closely monitoring the possibility of the Fed's rate-hiking campaign drawing to a close.
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