The first quarter of 2019, which ended on Friday, saw the biggest gains since 2009. All major indexes have grown since January 1, and some of the hardest hit stock from last year have been able to reclaim value, thanks to a surge in investor confidence.
Volatility towards the end of last year led to some of the biggest stock selloffs seen in months. However, a post-Christmas trading resurgence set the stage for a strong 2019 opening, and it has so far been one of the best on record.
Here’s what’s happened in the big indexes so far, and the factors that are driving growth.
All Major Indexes Show Significant Growth in Q1
First quarter results were largely upbeat, despite some analysts warning that business growth would start to slow this year. While the economy is definitely starting to lose some of its momentum, it is still expanding. This has led to significant gains across all sectors.
The heavily tech-weighted NASDAQ Composite Index (COMP) has been a standout performer. The chip market hasn’t crashed like some investors predicted, and some of the benchmark stocks like Microsoft (NASDAQ: MSFT) and Apple (NASDAQ: AAPL) have seen phenomenal growth this year. For the year to date, the NASDAQ is up +16.49%.
The Dow Jones Industrial Average (DJIA), which tracks 30 of the largest publicly traded companies, recorded gains of +11.15% in the first quarter. The Dow received a boost from powerful technology stocks as well as strong financial, healthcare, and industrial stocks. Growth across the Dow helps to show the strength of the market across diverse sectors.
The S&P 500 tracks the market capitalization of 500 large publicly traded companies. Like the Dow, it’s a good indicator of widespread market performance. This index has grown +13.07% year to date, further reinforcing the message that the first quarter was one of the best in recent memory.
What’s Driving the Stock Market?
Analysts have attributed renewed confidence to a stable Federal Reserve interest rate. It’s possible that there will be no further hikes until 2020, depending on how well the economy tracks this year.
Trade tensions are also easing, and it looks increasingly likely that the U.S. and China will sign a new long-term trade deal this year. Strong holiday quarter earnings also drove confidence well into 2019.
Nothing is ever guaranteed in the Stock market, but, as of today, the factors that drove confidence in the first quarter are still present. That’s a good sign for investors moving into Q2.
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