Why the S&P 500, NASDAQ, and Dow Rose to Record Highs
After rising for three trading weeks, the S&P 500 started this week on a stronger note and rose to record high price levels. On October 3, eight out of the 11 major sectors closed the day with gains. Strength in the telecom services and industrials sectors pushed the market higher. On the other hand, weakness in the energy and utilities sectors limited the gains.
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The market sentiment strengthened last week amid President Trump’s tax reform proposal. The proposed plan includes a reduction of the corporate tax rate from 35% to 20% and a tax bracket change from seven to three. Fed Chair Janet Yellen’s hawkish comments increased the chance of an interest rate hike and increased the market’s risk appetite. This week, stronger-than-expected ISM manufacturing PMI (purchasing managers’ index) data along with upbeat new vehicle sales in the US in September pushed the market to record high price levels. The market is looking forward to the ADP non-farm employment change data and non-manufacturing PMI data on October 4.
On October 3, 2017, the S&P 500 opened higher and rose to record high price levels. The CBOE Volatility Index (or VIX) measures uncertainty in the market. On October 3, it rose 0.63% to 9.51. The VIX is measured on a scale of one to 100 with 20 as the historical average. The VIX is also called the “fear index.” Usually, it has an inverse relationship with stocks and rises when the S&P 500 falls.
NASDAQ and Dow
The NASDAQ and Dow opened higher and ended the day at fresh record highs. The NASDAQ closed the day at 6,531.71 with a gain of 0.23%. The Dow Jones Industrial Average rose 0.37% and closed at 22,641.67.
In the next part of this series, we’ll discuss the S&P 500’s top gainers on October 3.