How the US stock market rocketed through the first quarter
economictimes.indiatimes.comstock market is off to a soaring start in 2024, as optimism over the economy and interest rate cuts has combined with exuberance about the business opportunity in artificial intelligence to stir up a potent cocktail for equities.
The S&P 500 has climbed more than 10% so far this year to post its biggest first-quarter gain since 2019. The benchmark index in late January hit its first record high in two years, as it built on a surge in late 2023, and has not looked back, setting more than a dozen highs without a significant pullback so far in 2024.
The tech-heavy Nasdaq Composite in late February also registered its first record high since November 2021.
Key to this year's gains has been confidence from investors that the economy is set for a «soft landing», in which inflation moderates but the economy avoids a severe downturn.
Nearly two-thirds of fund managers saw a soft landing as the most likely outcome for the economy in the next 12 months, while only 11% projected a «hard landing», according to BofA Global Research's latest monthly survey published in March.
A dovish Federal Reserve meeting this month, in which the central bank kept its view of three interest rate cuts this year while upgrading its economic outlook, has also encouraged many investors.
Stocks have been able to defy a rise in Treasury yields, after rising yields were a pressure point for equities in 2023. The yield on the benchmark 10-year Treasury was last around 4.2%, up from 3.86% at the end of last year.
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