Equity Bulls Push S&P 500 to Brink of Record High – US Market Wrap

Wall Street’s resumed drive for record highs saw stock investors put aside recent geopolitical concerns in the hopes that a return of Fed rate decreases will improve the outlook for the economy and corporate America. Treasury yields declined with the dollar.

The S&P 500 rose roughly $10 trillion from the edge of a bear market, briefly exceeding its closing high of 6,144.15 on February 19. The US equity benchmark surged over 1% to 6,141.02, driven by tech megacaps. Bank stocks rose after an experienced expert stated that as long as there is no recession, it is “game on” for the shares. The VIX, a frequently followed index of stock volatility, fell to 16 after reaching 52 at the height of April’s tariff-fuelled chaos.

Bonds rose after a slew of economic data suggested that the Fed could lower rates three times this year. Traders continued to expect officials to cut rates in September, with two cuts completely priced in before the end of the year. A third cut is around half priced. Short-dated Treasuries outperformed the remainder of the curve. The dollar index reached its lowest level since 2022.

The first quarter saw the slowest growth in consumer spending since the pandemic began. As a result, gross domestic product fell at a revised 0.5% annualised pace. Recurring unemployment benefit applications surged to their highest level since 2021, but initial claims decreased.