S&P Closed on Record-high in Tuesday’s Stock Market

After the worst performance recorded in February and March that ended its longest-running heyday in history, a silver lining appeared for the S&P 500.

The early months of the pandemic knocked the index down by 34% when economies succumbed to their worst recessions to date.

The stock index rose 7.7 points, translating to 0.2% in morning stock trading. It finally hit 3389.78, above its prior record of 3386.15 on February 19. It settled in a flat line for the rest of the session.

The rally from technology stocks helped the surge happen. Adobe and Alphabet are among the most significant performers.

Consumer-discretionary services are up by 1.5% with Amazon.com Inc. stocks extending their gains in the year to nearly 80%.

The recovery from the bear market territory also stemmed from the US Department of Commerce’s announcement of soaring housing starts. The record of privately owned new houses jumped up 22.6% in July.

Adding to this, corporate profit reports surpassing analyst forecasts also helped boost stock prices.

This signals a budding growth in the economy, driving stocks to enthusiasm.

Many investors note that there is a disconnect between stock market performance and the economy in general, but the rally is undeniably built from several state initiatives.

Hard work finally paid off for investors who watched stocks rise and fall carefully, keeping their patient attitude in a month-long bearish record.

The S&P 500 index is up by 4.9% so far this year.

 

Can the Growth be Sustained?

On the other hand, uncertainty still lurks. The new economic relief in Congress had not yet been settled.

There is an ironic push and pull of bullish stocks and a high unemployment rate. The year is record-breaking and heartbreaking at the same time, an investment strategist notes.

At a 10% climb, US unemployment reached its highest level since the great depression. A million people file for initial unemployment claims every week. Last week, it fell to 963,000.

The performance of other Wall Street stock indices remains relatively steady.

The Dow descended 0.2% to 27,778.07 while the Nasdaq Composite hit a new record after it climbed 81.12 points, now at 11, 210.84.

Goldman Sach’s forecast for the S&P 500 for the end of the year rose from 3,600 to 3,000. Optimism remains strong across New York’s financial district as the Fed pumps more cash into the economy.

However, the path remains unpredictable. The United States struggles with high mortality, now at 170,000 deaths.

One of the most significant risks worth noting is the development of the COVID-19 vaccine.

If an approved vaccine fails to reach the market at a target time that investors expect, it could result in a severe dent on the market’s huge rally.