The stock market is continuing to recover, with investors optimistic that the worst of the Coronavirus Pandemic is over for America. At the closing bell on Wednesday, the NASDAQ was just 1.4% away from its record close. During the day, the composite index gained 74.54 points, roughly equivalent to 0.8%.
At 9,682.91 points, this heavily tech-weighted index is only just shy of its all-time high of 9,817.18 points. The NASDAQ wasn’t the only strong performer. Major indexes across the board reported gains as investors see an upside to the current economic downturn.
The S&P 500 gained 1.4% and the Dow Jones Industrial Average gained 2.1%. Let’s take a look at what is driving the recovery.
Job Losses are Declining
Tens of millions of jobs have been lost since the Coronavirus Pandemic arrived in the United States. In April, 20.2 million workers were laid off, leading to the worst unemployment figure in modern history.
However, new data shows that only 2.76 million private-sector jobs were lost in May, compared to an analyst consensus of 8.66 million losses. It appears that the economic decline is starting to taper off. With states reopening their economies, we could be approaching a point where the numbers start to trend in a positive direction.
The federal government has injected billions into the economy, largely through stimulus programs like small business loans and one-off payments for citizens. GDP is still expected to decline by -5.8% this year, mostly due to a loss of consumer spending and corporate investment.
Some investors see an upside to the downturn. America’s economic growth was slowing down before the health crisis. This unexpected event may have triggered an inevitable recession, making it easier to understand, justify, and recover from.
Plenty of Opportunity for Investors Today
The NASDAQ’s rapid growth shows that tech is still a key driver in the stock market. Many of the best-performing stocks during the pandemic have been tech-centric, including popular blue-chip options like Microsoft (NASDAQ: MSFT) and Apple (NASDAQ: AAPL).
There’s also a strong case for value stocks and even ETF investment. The Pacific Global US Equity Income ETF (NYSE: USDY) is inexpensive and comes with an impressive 3.55% dividend yield.
Investors should look for growth patterns in today’s market. Diversification with stocks and funds could offer protection during this period. After all, the trend is still uncertain, with many risks underpinning the economy today.
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