With stocks up for the eighth-straight day as of Wednesday, Wall Street is closely watching the S&P 500 today. Indeed, should the stock index end the day in the green, it would mark a nine-day winning streak for the S&P 500 — the first since 2004.
So, what’s behind the S&P’s recent surge?
Well, despite rumors of an impending hard landing, it seems the stock market has had its own ideas. The S&P has only seen green in November, climbing more than 6% since Friday, Oct. 27.
Meanwhile, Wednesday marked the Nasdaq Composite’s ninth-straight day of gains, amounting to an around 8% increase. This gave both indices their longest winning streak since November 2021.
Interestingly, the past week of gains have come from some unlikely sources. The biggest winners of the recent rally include Expedia (NASDAQ:EXPE), which is up 26.8% over the past eight trading days, Generac (NYSE:GNRC) up 26.3%, Gartner (NYSE:IT) up 22.1%, Warner Bros Discovery (NASDAQ:WBD) up 21.6% and Monolithic Power Systems (NASDAQ:MPWR) up 21.3%.
Remarkably, the rally has pushed the S&P 500 up over 14% year-to-date (YTD), even despite the nearly 10% decline from August through October. As of this writing, the Nasdaq is also up a staggering 31% YTD, having almost recovered from its own 12% downswing over the past few months.
Will the S&P 500 Close in the Green?
While concerns are still rampant over a Federal Reserve-induced economic slowdown, the hard-landers have had a tough time building a case.
Not for nothing, in a macro sense, things have been good. As per this week’s jobs report, initial jobless filings declined by 3,000, reflecting a strong labor market despite elevated interest rates.
Inflation has been slowing, while jobs and consumer spending have remained strong. Indeed the U.S. economy has continued to operate at near-record levels of efficiency, despite pessimistic sentiments from many Americans.
At the time of writing, the S&P 500 is in the red by 0.29%. For better or for worse, the S&P’s rally may be contingent on none other than Fed Chair Jerome Powell.
Powell is expected to give a speech at the International Monetary Fund on Thursday. The saying “Don’t fight the Fed” has proven to be an instrumental proverb in understanding the market this year — and today may well be another example.
Should Powell take an optimistic stance regarding the economy, or even open up the possibility of rate cuts, traders may push the the S&P to its longest win streak in 20 years. On the flip side, if Powell even hints at more rate hikes to come, expect a bearish stock market response. As Susannah Streeter, Head of Money and Markets at Hargreaves Lansdown, notes:
“The recent winning streak on Wall Street is showing signs of starting to wane […] While hopes have risen recently that cuts will be on the horizon sooner rather than later next year, it is clear that the Fed will be driven by the data, and no definite path has been set.”
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.
