Third quarter trading started on Monday, and the U.S. stock market closed the day on the best possible note. All three of the main indexes were up, as investors felt confident and optimistic about the quarter ahead.
Why the Sudden Positivity in the Stock Market?
Trade tensions haven’t eased, but the stories surrounding trade disputes have started to taper off. Mindset is a huge aspect of investor confidence, and when the trade headlines are quiet, investors have less to worry about. Many investors appear to have accepted the tariff situation for what it is: an ongoing political drama that has the potential to damage the markets.
But, for now, that damage is neither significant nor widespread, and it may never come to be. Some individual stocks have been impacted directly, but these are outliers rather than the norm at this stage.
Surging tech stocks were responsible for a large part of the market growth on Monday. Tech has been the stalwart sector of the stock market this year. America’s largest tech companies have enjoyed high profits, strong growth, and ongoing investor confidence.
The stocks with the largest market capitalization are all tech based.
- Apple (NASDAQ: AAPL) was up 1.12% on Monday.
- Microsoft (NASDAQ: MSFT) was up 1.42%
- Alphabet (NASDAQ: GOOG) was up 1.06%
- Amazon (NASDAQ: AMZN) was up 0.82%
These stocks, along with others, sent the NASDAQ composite up 0.76%. It was the highest performing index for the start of the week. The S&P 500 was up 0.31%, and the Dow Jones Industrial Average was up 0.15%.
This is great news, especially compared to the past two weeks that were marred by historical slides.
There Are Still Factors That Could Undo the Gains
While the trade situation seems to be accepted as here to stay, it could still get nasty for American stocks if foreign governments make good on their promises to impose sweeping auto tariffs and tariffs on other American goods. This is speculative, so it’s still important to track the news to see how the politics could impact the market.
Trade policy in general will have one of the biggest influences on the stock market for the rest of the quarter. Markets will be closed on Wednesday the 4th of July for Independence Day, and this could mean heightened volatility as we lose mid-week trading.
For now, the month ahead looks promising, but, as usual, the stock market can take turns that nobody predicts. It’s always important to stay updated with the markets, keep a diverse portfolio, and make investment decisions based on all the data that is available.
You may be interested
Job Hiring is Picking Up as Employers and Consumers Gain ConfidenceLamont J - March 29, 2021
The recent government stimulus for small and medium-sized businesses, personal stimulus checks, and declining Coronavirus cases, are all great news…
Fed Could Maintain 0% Interest Rate Until 2024Adam R - March 26, 2021
The Federal Reserve is holding its target interest rate in a range of 0.00% - 0.25%, even while the economy…