Stock Market This Week (US): What made Nasdaq rise for the second consecutive week?

Stock Market This Week (US)

The S&P 500 advanced 1.43% this week. The Nasdaq Composite gained 4.41% as investors bet on technology - it was the best week since Jan. 13. With Friday’s slide, the Dow went into negative territory for the week, finishing 0.15% down. Let us look at how the week shaped up.

US stock market this week: Stocks movement this week

The US market fell on Monday as a plan to backstop all the depositors in failed Silicon Valley Bank. Experts bet the financial shock could cause the Fed to pause interest rate hikes. The Dow posted its fifth straight day of declines. Despite the negative sentiments, Nasdaq was able to close higher.

On Tuesday, all the benchmark indices ended higher, S&P and Dow added 1.06% and 1.65%, respectively. Nasdaq gained over 2%. Investors’ enthusiasm for buying bank stocks lost some steam in the afternoon session. But many still notched gains, marking a turn from two sessions of deep selloffs. Traders looked ahead to what’s next for the banking sector in light of the recent turmoil.

The US benchmark indices closed lower on Wednesday over a banking crisis spreading to Europe pressured the broader market. Investors were concerned after the Saudi National Bank, Credit Suisse’s largest investor, said it could not provide any more funding. The indexes regained some ground in the second half following an announcement from a Swiss regulator that the central bank would give Credit Suisse liquidity.

On Thursday, the US stock gained as the Street grew increasingly optimistic after a group of banks said it would aid First Republic Bank amid the industry’s crisis. The market started the day on a low but turned positive after a report suggested that other banks will support First Republic Bank.

The US stocks closed the week on Friday on a low as investors pulled back from positions in First Republic and other bank shares amid lingering concerns over the state of the US banking sector. Dow and S&P were down over a percent, while Nasdaq closed 0.74% lower.

Key Highlights of the week:

Goldman raises US recession probability to 35% on banking stress: The firm boosted its estimate of the odds of a US recession to 35% over the next 12 months in response to increased uncertainty over the economic impact of bank stress. The new estimate is still below the 60% median of economists surveyed by Bloomberg. Goldman’s proprietary indicators of activity growth still remain positive, with its business survey trackers averaging a slightly expansionary 52 in February, with the dividing line at 50.

Inflation numbers:  Inflation continued to drop in February, but at a slightly slower pace than hoped, with services inflation still sticky. Headline CPI came in at 6%, down from 6.4%, the smallest 12-month increase since September 2021 and the eighth straight month of improvement from its peak in June. Excluding food and energy, core inflation edged down to 5.5% from 5.6%, still a long way above the Fed’s target.

Oil prices fall to 9-week low: Oil prices dropped to a 9-week low this week as the recent bank failures sparked fears about a financial crisis that could reduce future oil demand, and after fresh inflation data increased the probability of rising interest rates. 

Coinbase shares up 40% in a week: Coinbase saw its shares jump 10% on Friday, taking its weekly gain up to almost 40%. The move followed a Bloomberg report that the company is exploring an overseas trading venue as regulatory scrutiny of crypto businesses ramps up in the US. Shares have also gotten a boost this week from the rally in bitcoin, which continued its climb from earlier in the week.

This is not investment advice. Investments in the securities market are subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future returns.