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US Markets Digest Interest Rate Hike Comments

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S&P 500

After showing a strong performance for two consecutive trading days, the S&P 500 maintained its strength and closed at the highest levels since March 20. On Wednesday, the market was supported by a rally in energy and consumer discretionary stocks.

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More interest rate hikes in 2017?

In his speech at the DZ Bank-OMFIF International Capital Markets Conference in Frankfurt, Germany, Charles Evans, Chicago Fed president, discussed US interest rate hikes. He discussed the chances of one or two interest rate hikes in 2017 due to strong fundamentals in the US economy. He said that the unemployment rate might fall to levels that could keep inflation stable in the near future. He also added that he expects three more interest rate hikes in 2018.

In his speech on March 29, Eric Rosengren, Boston Fed president, commented that he expects an aggressive pace. Rosengren commented that four interest rate hikes in 2017 would be appropriate for the current economy. US markets digested the chances of more interest rate hikes this year. On Wednesday, Vertex Pharmaceuticals (VRTX), Chesapeake Energy (CHK), and Nordstrom (JWN) were the top performers in the S&P 500.

Volatility Index

On March 29, the S&P 500 started the day on a positive tone and ended the day higher. The S&P 500 VIX Index (CBOE Volatility Index) measures uncertainty in the market. On Wednesday, it fell 0.95% to 11.42. It’s measured on a scale of 1–100 with 20 as the historical average. It’s also called the “fear index.” Generally, it moves opposite to stocks’ movements—it falls when the S&P 500 rises.

On Wednesday, the NASDAQ Composite Index gained for the fourth consecutive trading day and rose to the highest levels since March 20. The NASDAQ Composite Index gained 0.38% on March 29 and closed the day at 5,897.55. The Dow Jones Industrial Average stayed below 21,000. It closed at 20,659.32—a fall of 0.2% or 42.18 points. The SPDR S&P 500 ETF (SPY) gained 0.09% on March 29.

The market is looking forward to US GDP data and initial jobless claims data scheduled to release today at 8:30 AM EST. The market is also waiting for Fed members’ speeches on March 30.

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