High inflation this Thursday did not deter the stocks on Wall Street, which rose despite negative data. Consumers had been spending more than analysts expected this August. Those supplying goods had to deal with higher prices. To top it all off, the European Central Bank made a decision to raise interest rates to record highs at 4.0%. Nevertheless, investors seemed to hold the belief that the US economy would be resilient. This could be due to the strength of labour and consumer markets generally.
Investors now believe that the Fed will not raise interest rates in the following week. However, they do believe that it is possible that they may raise rates by a quarter of a per cent before 2024. Consumer inflation being within safe levels and a tight labour market have also boosted their confidence. For now, it seems like traders will commit to investing even in volatile stocks.
The Stocks See Positive Trends Amid Inflation Concerns
Overall, traders have been worrying lately. There is a possibility that inflation could persist for a while. This could then cause the Fed to react by raising interest rates once again. However, some positive signs allayed their fears. The cost of fuel being relatively low was the main one, considering the Fed’s usual attitude to gas prices.
The stocks then rose in all sectors. All sectors in the S&P 500 did well, with an overall growth of 0.8%. The NASDAQ and Dow Jones performed well too, with a rise of 0.8% and 1.0%, respectively. This helped in recover from a recent minor slump.
Among the major winners were Carnival and Norwegian Cruise Lines. They managed to gain 4.1% and 5.7%, respectively, in a single day! Despite high costs for fuel, there is still plenty of demand for the travel industry and other transportation-based firms. So the demand has managed to overcome possible challenges. Cyclical stocks had thus done well by following major trends.
