After rising on Monday and starting the week on a positive note, the S&P 500 continued to trade higher on April 25. Nine out of 11 major sectors of the S&P 500 gained on April 25. The materials sector and energy sector led the rally in the market.
Factors supporting the rally
The market rally is supported by decreased geopolitical uncertainty, expectations of progress in tax reform plans, and stronger-than-expected first quarter earnings. Macron’s lead in the first round of France’s presidential election decreased risks in European markets and triggered a global election relief rally. As a result, NASDAQ rose to all-time high price levels on Monday and Tuesday. Expectations of action on a corporate tax reform plan this week also supported the sentiment. On April 29, President Trump will have been in office for 100 days.
So far, stronger-than-expected first quarter earnings are supporting the market. Caterpillar (CAT) and McDonald’s (MCD) rose on Tuesday when their earnings beat estimates. In the next part of this series, we’ll discuss Caterpillar’s first quarter results and its movement on April 25. As of April 25, 135 companies have reported their first quarter earnings. It’s important to note that 78% of the companies reported better-than-expected earnings. The market is looking forward to the first quarter GDP data scheduled to release this week.
The S&P 500 VIX Index (CBOE Volatility Index) measures uncertainty in the market. On April 25, it fell 0.74% to 10.76. 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 rises when the S&P 500 falls. The S&P 500 opened the gap on Tuesday and traded higher. The Dow Jones Industrial Average closed at 20,996.12—a gain of 1.1%. Like the S&P 500 and Dow Jones, the NASDAQ Composite Index also rose on Tuesday. It rose 0.7% on April 25 and closed the day at 6,025.49—a record high.
In the next part, we’ll discuss the top market movers on April 25.