Stock Market This Week (US): Why did Nasdaq jump 1% this week?

Stock Market This Week (US)

The US market ended the first week of 2023 on a high - thanks to a sharp rally on Friday. The S&P500 and Dow gained over 1.5%, while Nasdaq100 gained a percent in the week.

US stock market this week: Stocks movement this week

The US market was closed on Monday for the New Year holiday.

On Tuesday, the US market closed lower after starting on the green side. The rising rates and high inflation that knocked that market down last year continue to trouble investors. Shares of Apple and Tesla both slipped, which dragged the broader market. Tesla was down over 12%, hitting the lowest level since August 2020.

The US stocks closed lower on Wednesday after a choppy session as investors looked past Fed's meeting minutes which suggested that the central bank will remain aggressive in its policy to bring inflation down. Major indices ended over half a percent higher. However, bond yields were lower.

On Thursday, the US market ended lower, but the job data suggest that the labor market is still strong despite the Fed's interest rate hikes. All the major indices fell over a percent. As per experts, investors don’t want to see big gains in wage growth as it could signal higher inflation.

All the major US indices closed over 2% higher on Friday - it was one of the best days for the indices in recent weeks. The weekly data suggest that showed signs that inflation may be cooling, signaling that the Fed's interest rate hikes are having the intended effect.

Key highlights for the week:

Goldman Sachs on recession: Goldman Sachs, in its latest report, has said that their economists continue to believe that the US will avoid recession as the Fed successfully engineers a soft landing for the economy. The firm's analysis indicates that the drag from fiscal and monetary policy tightening will diminish sharply this year, in contrast to the consensus view that the lagged effects of interest rate hikes will cause a recession in 2023.

Fed's latest meeting update: The Fed's latest meeting indicates that the Federal Reserve has no intention of cutting interest rates anytime soon. As per Citi's experts, the message in the minutes is that rates are going to be higher for longer. Who knows, at the end of the day, if they are going to keep rates that high for long, but that’s the message they wanted to send.

Labor market updates: The December nonfarm payrolls report showed that the US economy added 223,000 jobs in December, slightly higher than the expected 200,000 jobs economists polled by the Dow Jones expected. However, wages grew slower than anticipated, increasing 0.3% in the month when economists expected 0.4%.

Bond yields: The news of a slowdown in the services sector has sent both short-term and longer-term US Treasury yields sharply lower on Friday morning, leaving the yield on the 10-year note down over 30 basis points for the week.

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