The stock market is seeing green on Tuesday as equities attempt to resume their rally after last week’s jump. Why are stocks up today?
Well, Wall Street appears to be feeling cheery as markets look to close the first quarter with record gains. Indeed, the S&P 500 and Nasdaq Composite are up 10.2% and 11.2%, respectively, just three months into the year. This puts the S&P on track for the 12th-strongest first quarter since 1945 as the index trends around its all-time high.
Investors approached the year feeling relatively lukewarm about equities. With interest rates restrictively high, many assumed that stocks were in for a mild year.
Fortunately, the red-hot artificial intelligence (AI) wave has proven overwhelmingly bullish for stocks. Six Wall Street banks have already lifted their targets for the S&P this year as tech stocks carry equities with promise of staggering future revenue.
Chipmakers in particular have enjoyed some rapid stock price growth, with the likes of Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) on track to close Q1 up 95% and 30%, respectively.
Why Are Stocks Up Today?
Recent economic data may also be playing a role in today’s uptick. Indeed, durable goods orders swung up in February, climbing 1.4% on increased orders of transportation equipment and machinery.
Wall Street is now eyeing the February Personal Consumption Expenditures (PCE) report, due this Friday. The Federal Reserve’s favorite inflation gauge is expected to climb 0.36% month-over-month, pushing the annual inflation rate to 2.47%. This would mark a mild change from January’s 2.4% reading.
It appears traders have renewed faith in the Fed’s fight with inflation. This is likely because of Fed Chair Jerome Powell’s relatively dovish commentary at last week’s policy meeting. Powell maintained expectations to cut rates three times this year, while showing confidence in the disinflation process.
“We believe that our policy rate is likely at its peak for this tightening cycle and that, if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” Powell said in a press conference following the Fed meeting.
As of this writing, the S&P and Nasdaq are up 0.21% and 0.35%, respectively, today.
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.
