Recent Housing and Manufacturing Data Indicate Economic Strength – US Market Wrap

The relentless rally in stocks was propelled by optimism that the Federal Reserve would be able to engineer a soft landing, which would improve the outlook for corporate earnings.

A renewed bout of risk-taking propelled the S&P 500 to its 20th record this year, aided by gains in industrials and banks. Not even losses in two megacaps, Apple and Alphabet, slowed the market’s momentum. The Nasdaq 100 also reached an all-time high, boosted by Micron Technology’s outlook. Reddit skyrocketed in its debut.

The most recent round of housing, manufacturing, and labor-market data showed a resilient economy, which should worry policymakers trying to bring inflation back on track. A day after the Fed signalled that rates will be cut this year, traders decided to keep looking at the bright side of things.

The S&P 500 surpassed 5,240. Small caps extended the week’s gains. Treasury 10-year yields were little changed, at 4.27%.

Across the Atlantic, the British pound fell after two Bank of England hawks dropped their call for hikes. A surprise decision by the Swiss National Bank to cut interest rates also pushed the Swiss franc lower.