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What’s moving U.S. markets right now?

What's moving U.S. markets right now?

An old Chinese curse allegedly says: “may you live in interesting times,” and at least since the start of the COVID-19 pandemic in 2020, most people around the world have indeed been living in interesting times. 

This broader trend has certainly been well reflected in the stock market, which has, with fears of a recession, rampant inflation, skyrocketing interest rates, limited banking crises, virus, bomb, and missle-caused supply chain issues, been nothing short of a rollercoaster. 

In the last few months, there has been a significant change in tone as both the stock and crypto markets have seemingly turned decisively bullish, with many major price indices worldwide reaching new highs. Additionally, the “Fear & Greed Index” that tracks investor sentiment recently turned to “extreme greed.”

Fear & Greed Index on December 19, 2023. Source: CNN

With these recent developments in mind, Finbold decided to try to analyze what is moving U.S. markets right now.

FED hints toward victory in the battle against inflation

Throughout 2022, Federal Open Market Committee meetings have brought shock after shock to the stock market with multiple consecutive interest rate hikes. This year, the FED was seemingly vindicated in its aggressive approach as the once-rampant inflation has decreased to a more manageable 3.1%, per the November print.

This has, in turn, led the FED to hold off on further hiking the interest rates, which are currently fixed at 5.25%-5.5%. The trend is now expected to turn even more favorable for investors, with Bank of America (NYSE: BAC) recently coming out with the expectation that 2024 will see at least four rate cuts.

Combined, investors have welcomed these trends and figures and have proven to be major contributors to the recent stock market optimism.

Positive corporate developments

Along with the broader macroeconomic trends, quite a few major corporations came forward with significant positive developments on the business side.

 The overall strength of the semiconductor industry is particularly noteworthy, with its largest player – Nvidia (NASDAQ: NVDA) – recently announcing a brand-new high-end chip and entering into negotiations with the U.S. government on how to resume exports to China.

NVDA YTD price chart. Source: Finbold

Major technology firms – particularly those with some involvement in the burgeoning artificial intelligence (AI) industry – have also logged strong results, further driving investor confidence and even enthusiasm.

Among these, Amazon (NASDAQ: AMZN) – a leader when it comes to cloud computing through its AWS business – and Microsoft (NASDAQ: MSFT) – instrumental in ChatGPT’s emergence – are particularly noteworthy. 

Additionally, Microsoft also managed to further boost confidence in its leadership by successfully navigating a crisis that recently developed at OpenAI when Sam Altman suddenly ceased being the company’s CEO.

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