S&P 500 reclaims the 4000 mark, as US equities record its best month since 2020

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  • The three major US equity indices advanced between 0.97% and 1.88%.
  • A risk-on impulse since last Wednesday underpinned US equities, lifted by US corporate earnings of Amazon and Apple.
  • The US Dollar Index fell below 106.000, while the US 10-year T-note yield finished around 2.654%.

US equities finished the week on a higher note, as Amazon and Apple soared as earnings from both companies exceeded analysts’ estimates after the US Federal Reserve hiked rates 75 bps in the week, spurring a rally that carried on until the end of the week/month.

The S&P 500 closed the week gaining 1.42%, at 4,130.28, while the tech-heavy Nasdaq rose 1.88%, up to 12,390.69. Additionally, the Dow Jones Industrial followed suit and climbed 0.97%, finishing at 32,845.13.

Sector-wise,  the leading sectors are Energy, up by 4.51 %, followed by Consumer Discretionary and Industrials, each recording gains of 4.27% and 2%, respectively. The biggest losers were Consumer Staples and Health, diving 0.72% and 0.35% each.

Shares fell due to Walmart cutting its earnings forecast, complaining about double-digit food prices and elevated energy prices. Additionally, the US Federal Reserve monetary policy decision is looming, and Europe’s escalating energy crisis re-ignited recession fears amongst traders, which turned to safe-haven assets, namely the greenback.

Global equities remain to trade positively, reflecting an upbeat sentiment. Data-wise, the US Department of Commerce revealed that June’s Personal Consumption Expenditure rose 1% MoM, higher than 0.9% estimations. Annually based, edged higher by 6.8%, vs. 6.7% foreseen by analysts.

Late, the University of Michigan reported that Consumer Sentiment on its final reading for July beat expectations and rose 51.5. In the same survey, inflation expectations for a 5-year horizon, from 2.8% (preliminary) to 2.9%, though less than June’s readings.

In the meantime, Fed speakers began to cross wires. The first one was Atlanta’s Fed President Raphael Bostic, who said that the Fed is “going to have to do more in terms of interest-rate moves” and added that he does not think the country is in a recession. In the meantime, Christopher Waller said that “a soft landing is a plausible outcome for the labor market going forward.”

Elsewhere, the US Dollar Index (DXY), a measurement of the greenback’s value against some currencies, fell 0.67% to 105.828, while the 10-year US Treasury yield dropped two bps, yielding 2.654%.

In the commodities complex, WTI gained 1.95%, exchanging hands at $98.30 BPD. Meanwhile, precious metals like gold (XAU/USD) increased by 0.78%, trading at $1764.00 a troy ounce.

SP 500 Chart

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