Why Are Stocks Up Today?

  • Indices are up across the board today.
  • It seems today’s Q4 GDP estimate, as well as initial unemployment claims data are contributing to today’s climb.
  • The S&P 500, Dow 30 and Nasdaq Composite are each up less than a percent heading into the afternoon.
why are stocks up today - Why Are Stocks Up Today?

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The stock market is enjoying some time in the green today on a number of promising economic data points. Indeed, led in large part by tech giants Tesla (NASDAQ:TSLA), Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT), the S&P 500, Dow 30 and Nasdaq Composite are each up less than a percent this morning. Should the indices stay the course, today could contribute to this week’s already solid performance.

So, why are stocks up today?

Well, at first glance the stock market surge may be a result of relatively promising unemployment data. The Labor Department released first-time jobless claims for the week, and the results were strong. Unemployment claims surpassed expectations, 198,000 compared to 195,000 expected. In a time when the Federal Reserve is raising rates with the goal of lowering prices, higher unemployment is an unfortunate reality.

To get prices to go down, most economists agree the country needs unemployment to rise from its current 3.6% level. In that regard, the fact that unemployment claims seem to be increasing can be read as a sort of “beginning of the end” to the Fed’s rate hikes. This is why something traditionally bearish, like rising unemployment, is considered promising under current economic conditions.

What else is going on with the stock market?

Why Are Stocks Up Today?

The other macroeconomic data that may be contributing to today’s minor rally is the Q4 gross domestic product (GDP) estimates released today. The final Q4 estimate came in at 2.6%, slightly below estimates of 2.7%. Again, this is a situation where “kinda bad” is “kinda good.”

For prices to fall, it’s only natural that economic growth and production will have to slide. While no one’s exactly cheering for a recession, the economy will need to slow down for prices to fall. As such, today’s minor dip in the GDP estimate could reasonably be read as slightly bullish.

Wall Street seems to be keeping a lid on any rallies ahead of Friday’s crucial Personal Consumption Expenditures (PCE) Price Index report for February. The Fed-preferred inflation gauge is the best economic indicator to watch for signs of falling prices. Should the report come out stronger than January’s 5.4% annual inflation, expect an even stronger stock surge to end the week.

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2023/03/why-are-stocks-up-today-15/.

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