Dow, S&P 500 Surge to New Heights Amid Renewed Optimism

Vida Markets

Thursday 28th March 2024, 1:32 pm Time to read: 7 mins.

In a stunning reversal from a recent slump, the Dow Jones Industrial Average and the S&P 500 roared back to life, signalling investor confidence and economic optimism across the board. Wednesday's trading session closed with the Dow surging over 450 points, while the S&P 500 reached a fresh record, breaking a three-day losing streak with

In a stunning reversal from a recent slump, the Dow Jones Industrial Average and the S&P 500 roared back to life, signalling investor confidence and economic optimism across the board. Wednesday's trading session closed with the Dow surging over 450 points, while the S&P 500 reached a fresh record, breaking a three-day losing streak with a gain of 0.86%. This remarkable recovery was led by standout performances in the S&P 500, particularly Cintas and Merck, the latter reaching a new all-time high following a pivotal FDA approval. Amidst a backdrop of mixed global economic data, from European retail triumphs to the complex dynamics of the Asia-Pacific markets, investors navigated through the uncertainties, pushed by corporate earnings beats and strategic moves in the tech sector. As the quarter draws to a close, the financial markets reflect a blend of caution and hope as they look ahead to impending economic indicators and potential external market shifts.

Key Takeaways:

US Markets Surge, S&P 500 Hits Record High: The Dow Jones Industrial Average surged by 477.75 points, or 1.22%, closing at 39,760.08, while the S&P 500 rose by 0.86% to reach a new record of 5,248.49, snapping a three-day series of losses. This marks the first day of gains in four for both indexes, underscoring a positive shift in investor sentiment. The tech-heavy Nasdaq Composite saw a more modest increase of 0.51%, ending the day at 16,399.52. Despite trailing behind the Dow and S&P 500, the Nasdaq's rise contributes to the broader market's upward momentum.
European Markets Show Modest Gains: The European stock markets experienced slight gains, with the Stoxx 600 index edging up by 0.1%. This increase came despite mixed performances across sectors, notably with retail stocks soaring by 2.7%, lifted by H&M's impressive 15% rise after its fiscal first-quarter operating profit significantly exceeded expectations. Conversely, travel stocks faced headwinds, dropping by 2.4%. Economic data remained a focal point, with Spanish inflation reported at 3.2% for March, suggesting persistent price pressures. Meanwhile, French consumer confidence saw a cautious uptick, hinting at the delicate balance between economic recovery and inflationary challenges within the region.
Mixed Responses in Asian Markets: Asian stock markets presented a mixed response, with Japan's Nikkei 225 gaining 0.9% and closing at 40,762.73, while the broad-based Topix rose by 0.66%. On the other hand, China's CSI 300 index fell by 1.16% to close at its lowest level in about a month, and Hong Kong's Hang Seng index dropped by 1.44%, reflecting investor nervousness towards recent economic data releases. China's reported 10.2% year-on-year increase in combined industrial profits for January and February contrasted with a 2.3% dropped across 2023. South Korea’s Kospi fall 0.07% to 2,755.11. Furthermore, Australia's consumer price inflation reading for February showed a 3.4% year-over-year increase, adding to the discussion on future interest rate decisions by the country's central bank.
Quarterly and Monthly Index Gains Point to Robust First Quarter: As the trading month and quarter draw to a close, the S&P 500 shows a nearly 3% increase for the month and 10% for the quarter, while the Dow has added 1.9% monthly and about 5.5% quarterly. The Nasdaq's growth stands at 1.9% for March and 9.3% for the quarter, indicating the best first-quarter performance since 2019 and 2021 for the S&P 500 and Dow, respectively.
Renault-Nissan Adjustment Reflects Strategic Rebalancing: Renault's decision to sell a portion of its Nissan shares underscores a strategic shift within the auto industry, aiming for financial stability and a stronger focus on future growth areas. This move, expected to result in a capital loss on Renault's accounts, is part of a broader effort to streamline operations and reinforce the long-standing alliance between the two automotive giants.
FX Today:

US Dollar Index Sees Mild Gains Amid Anticipation: The US Dollar Index (DXY) is trading with slight advances, reaching a level close to its recent peak of 104.50. The ongoing buying momentum is further supported by the Moving Average Convergence Divergence (MACD) showcasing flat green bars, while its position above the 20, 100, and 200-day Simple Moving Averages (SMAs) underscores a long-term bullish outlook.
GBP/USD Remains Steady in Quieter Market Conditions: The GBP/USD pair encounters resistance at the 100-day moving average (DMA) at 1.2639, limiting upward movements, whereas the 200-DMA at 1.2589 serves as a pivotal support. For bullish momentum to resume, breaking above the 100-DMA could pave the way towards the 50-DMA at 1.2678, potentially testing the 1.2700 threshold. Conversely, a downward move through the 1.2600 mark and below the 200-DMA could lead to a test of the 1.2505 level, a critical support turned from the November 14 high.
EUR/JPY Encounters Mild Losses with Bullish Sentiment Under Pressure: Trading with slight declines at 163.75, EUR/JPY's short-term dynamics hint at an impending shift towards bearish sentiment, despite the pair’s strong positioning above critical SMAs (20, 100, and 200 days). The upcoming transition poses a challenge for bulls, who must defend the 20-day SMA to maintain the pair's upward trajectory amidst broader market uncertainties.
Gold Nears $2,200 Threshold, Boosted by Rate Cut Speculation: Gold prices witnessed a resurgence, moving towards the critical $2,200 mark after a brief dip to a weekly low of $2,163. A break above the $2,200 level could open the path to testing the all-time high at $2,223. On the other hand, a move below the support level at $2,146, the December 4 high, could trigger a sell-off, potentially driving prices towards the $2,100 mark, with the next significant support at the December 28 high of $2,088.
Market Movers:

nCino Jumps on Earnings Beat: Shares of nCino leaped 19% after the cloud banking services provider reported fourth-quarter earnings that exceeded expectations and announced a 13% year-over-year revenue increase, highlighting its growth trajectory.
Cintas Leads with Strong Performance: Cintas' stock jumped 8% after reporting fiscal third-quarter results that exceeded market expectations, coupled with an increase in gross margins of 14.9% year over year. The company also raised its earnings and revenue guidance for the full year.
GameStop Faces Downward Pressure: GameStop's shares fell by 15% following the announcement of lower fourth-quarter revenue compared to the previous year. The company also implemented cost-cutting measures, including layoffs, in an effort to streamline operations.
Merck Soars on FDA Approval: Shares of pharmaceutical giant Merck surged nearly 5%, reaching a new all-time high, after the US Food and Drug Administration approved Winrevair for treating pulmonary arterial hypertension, a life-threatening lung condition.
Trump Media & Technology Group Surges Following Debut: Shares of Trump Media & Technology Group soared over 14%, building on the momentum from their recent market debut under the DJT ticker, reflecting robust investor interest.
Reddit Slides After Recent Gains: The social media company's shares dropped by 11%, following a 9% surge on Tuesday. Reddit had been experiencing a post-IPO rally since its debut on the New York Stock Exchange the previous week.
Marvell Technology Gains on Positive Outlook: Shares of Marvell Technology appreciated by 6% after Citi initiated a positive catalyst watch on the stock, highlighting the potential upside from its involvement in artificial intelligence technologies.
Robinhood Introduces New Product, Shares Rise: Robinhood saw its shares increase nearly 4% following the announcement of the Robinhood Gold Card, a credit card offering high cash back rewards that deposit directly into users' brokerage accounts.
Deutsche Bank Upgraded, Shares Surge: Deutsche Bank experienced nearly a 4% uplift in its shares after Morgan Stanley upgraded the stock to overweight. The firm cited potential for additional gains on top of the year's notable performance.
General Electric Boosted by Analyst Optimism: Shares of General Electric gained 3% after Wells Fargo restated an overweight rating and raised its price target to $200, citing potential benefits from cost reductions.
Concentrix Outperforms Market Expectations: Concentrix's shares rose about 5% following the release of first-quarter revenue figures that exceeded estimates, with $2.40 billion against the expected $2.38 billion. The company reaffirmed its yearly guidance.
Coinbase Faces Legal Challenges, Shares Decline: Coinbase's stock fell nearly 4% after a judge ruled that a jury could decide on the SEC's claim that Coinbase operates as an exchange, a pivotal moment in the ongoing lawsuit filed by the SEC in June.
Moderna Advances on Vaccine Trial Progress: Shares of Moderna climbed 3% as the company announced the progression of three vaccines into final-stage trials, showcasing its continued focus on expanding its vaccine portfolio.
As the first quarter of 2023 draws to a close, Wednesday's market rally and the new record set by the S&P 500 signify a revival of optimism among investors. Despite lingering concerns about economic headwinds, the strong performance of technology stocks and sectors like consumer discretionary and industrials has powered a renewed sense of confidence. However, with key economic data and corporate earnings still to come, the market's trajectory remains uncertain, and investors will closely monitor any potential catalysts that could disrupt the current upward momentum.


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