Stock Market Sees Resurgence After Holiday Slump
The US stock market is experiencing a much-needed rebound, recovering from the losses that plagued the holiday season. As of midday trading, the S&P 500 is up 1.3%, on track for its second consecutive gain after a five-day losing streak, its longest since April. The Dow Jones Industrial Average has also seen a significant increase, up 319 points or 0.7%, while the Nasdaq composite is 1.9% higher.
Tech Stocks Lead the Charge
Tech stocks are driving the market’s resurgence, particularly those involved in artificial intelligence technology. Nvidia, a leader in AI, has seen its stock price surge 5.1% ahead of CEO Jensen Huang’s speech at the annual CES convention in Las Vegas. Despite concerns about a potential bubble, the industry remains optimistic about its potential, with Microsoft Vice Chair Brad Smith stating that AI is the biggest opportunity to boost the nation’s economy since the invention of electricity.
Uber and US Steel See Significant Gains
Uber’s stock price has risen 3.1% after the company announced plans to accelerate $1.5 billion in stock purchases, part of a previously announced $7 billion buyback program. Meanwhile, US Steel has seen a 4.2% increase after filing a federal lawsuit challenging President Joe Biden’s decision to block a proposed $15 billion deal with Japan’s Nippon Steel.
Market Events to Watch
This week will be packed with potentially market-moving events, despite the New York Stock Exchange and Nasdaq closing on Thursday for a National Day of Mourning for former President Jimmy Carter. On Tuesday, updates on monthly job openings and the health of businesses in the services industries will be released. The Federal Reserve will also release the minutes from its last policy meeting on Wednesday, which could provide insight into future interest rate decisions. Finally, the monthly jobs report and an update on consumer sentiment will be released on Friday.
Economic Resilience
Despite high interest rates, the economy has remained resilient, with business confidence improving since the presidential election. A report on Monday showed that business activity in the services economy surged higher in December, with fuller order books and rising optimism about prospects for the year ahead. The Fed has been trying to support the economy, cutting interest rates in September after inflation pulled nearly all the way down to its 2% target. However, getting the last percentage point of improvement from inflation may prove more difficult, and worries are rising that tariffs and other policies could put upward pressure on inflation.
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