Last updated: 26 Jun, 2021 | 10:33 am
US stocks started off the week on a strong note on Monday, as investors lapped up shares in the energy and other sectors expected to outperform as the economy rebounds. The rally continued on Tuesday, after Fed chair Jerome Powell said that the central banks will not raise interest rates too quickly, amid fears of rising inflation.
After hitting new highs over the previous two days, the S&P 500 took a breather on Wednesday. The index resumed its rally to hit new highs on Thursday, after President Joe Biden announced a new infrastructure deal, which includes $579 billion in new spending.
The S&P 500 finished at a fresh record Friday, concluding a strong bounceback week for Wall Street. The broad-based index ended at 4,280.70, up 2.7% for the week.
Weekly US market stats with IND
Let’s see the major developments during the week:
US GDP growth robust: The US GDP grew at a solid 6.4% in the Jan- Mar 21 period, setting the stage for what economists believe may be the strongest year for the economy in the country in 70 years. Going forward, the strong growth is expected to continue as due to wider availability of vaccines, fiscal stimulus and supportive policy.
Fed reiterates supportive policy: Jerome Powell reaffirmed the central bank’s supportive monetary policy, and vowed not to raise interest rates too quickly. The central bank wants to encourage a broad-based and inclusive recovery of the job market, and keep interest rates at the current levels despite fears of rising inflation.
Oil prices soar: Oil prices rose to their highest level since October 2018 on Friday, making it the 5th straight week of rise. There are expectations that the demand growth will be higher than the supply as the OPEC+ is cautious in returning more crude to the market from August.
The OPEc+ is due to meet on July 1 to discuss further easing of their output cuts from August. Oil (WTI crude) ended the week 3.3% higher.
Biden’s infra push: President Joe Biden announced on Thursday that a bipartisan group of 10 Senators had agreed on a plan for roughly USD 1 trillion in infrastructure spending over the next five years. Economically sensitive stocks rallied on the back of this news during the week.
Robust macro data: IHS Markit’s gauge of June manufacturing activity came in higher than expectations and climbed to a record 62.6 (with readings above 50 indicating expansion). The June preliminary Purchasing Managers' Index (PMI) is a leading indicator of economic activity.
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