After regaining strength last week by breaking the two-week losing streak, the S&P 500 started this week on a mixed note. Despite the weak market sentiment and decreased risk appetite, the S&P 500 closed positive in the first two trading days of the week and started Wednesday on a stronger note.
On August 30, eight out of the S&P 500’s 11 major sectors closed with gains. Strong IT and materials stocks supported the market, while weakness in the utilities and telecom services sectors limited the upward movement.
The market sentiment was weak at the beginning of the week amid geopolitical tensions triggered by North Korea’s missile launch over Japan, devastating floods in the Gulf Coast, and US political concerns. However, the market remained strong amid supporting economic data and recorded a four-day winning streak—the S&P 500’s longest rising streak in three months. On Tuesday, the market sentiment improved and investors’ risk appetite increased after an official statement by the US on North Korea’s missile launch. There weren’t any threats in the statement. The upward momentum increased after the release of stronger-than-expected second quarter GDP and ADP non-farm employment change data. According to the second revision of the 2Q17 GDP data, the US economy expanded 3% in the second quarter—higher than the market’s forecast of 2.7% and the initial reading of 2.6%.
On August 30, the S&P 500 started with improved sentiment and closed higher. The CBOE Volatility Index (or VIX) measures uncertainty in the market. On August 30, it fell 4.1% to 11.22. 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.” It usually has an inverse relationship with stocks and rises when the S&P 500 falls.
NASDAQ and Dow
Like the S&P 500, the NASDAQ Composite Index and the Dow Jones Industrial Average also started on a stronger note and rose as the day progressed. The tech-heavy NASDAQ Composite Index rose 1.1% amid strength in the IT sector and closed the day at 6,368.31. The Dow Jones Industrial Average rose 0.12% and closed at 21,892.43.
In the next part, we’ll discuss the S&P 500’s top gainers on August 30.