[New York Stock Market] Rebounds After Three Days... S&P 500 Hits All-Time High

February PCE Price Index to be Announced on 29th
Truth Social Surges Over 14%

The three major indices of the U.S. New York stock market all closed higher on the 27th (local time). Benefiting from bargain buying, the market rebounded for the first time in three days, with the S&P 500 index hitting an all-time high. The market is focusing on the February Personal Consumption Expenditures (PCE) price index to be released on the 29th.

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On that day at the New York Stock Exchange (NYSE), the blue-chip-focused Dow Jones Industrial Average rose 477.75 points (1.22%) from the previous trading day to close at 39,760.08. The large-cap-focused S&P 500 index ended trading at 5,248.49, up 44.91 points (0.86%), marking a record high. The tech-heavy Nasdaq index closed at 16,399.52, up 83.82 points (0.51%).

By individual stocks, U.S. pharmaceutical company Merck surged 4.96% on news that its pulmonary arterial hypertension treatment Winlevi had been approved. Truth Social’s parent company, Trump Media & Technology Group (TMGT), founded by former U.S. President Donald Trump, jumped 14.19%. Following a 16.1% rise on its first day of listing the previous day, it recorded double-digit gains for two consecutive days.

The New York stock market had shown weakness throughout the week but managed to rebound on this day after three days. Last week, the U.S. Federal Reserve (Fed) maintained its forecast for three rate cuts this year, sparking a rally, but with no further positive news, the market entered a consolidation phase.

Gina Volbin, President of Volbin Wells Management Group, said, "The bull market will continue," adding, "History shows that momentum breeds momentum." She predicted that a strong combination of AI tailwinds, low interest rates, easing inflation, and earnings growth could potentially drive stock prices higher. However, she also noted the possibility of a 5-7% correction.

Robert Shine, Chief Investment Officer (CIO) of Blank Shine Wells Management, analyzed, "Valuations could bring us back to a kind of reality," but also said, "In the long term, this rally can continue, and liquidity provides considerable momentum."

There are also forecasts that the stock market could decline. Michael Green, Chief Strategist at Simplify Asset Management, said, "If we face events that increase volatility, we will face greater pressure in the coming months," adding, "When the effects of change begin to appear, they become a source of uncertainty."

The most closely watched indicator this week is the February core Personal Consumption Expenditures (PCE) price index to be released on the 29th. The core PCE price, which the Fed places the most importance on, is expected to have risen 0.3% month-over-month in February, down from 0.4% in January. However, the annual increase is expected to remain steady at 2.8%, the same level as January. Since the Consumer Price Index (CPI) exceeded market expectations for two consecutive months in January and February this year, attention is focused on the PCE price trend. However, since the 29th is Good Friday, a holiday before Easter, market reactions to the inflation data are expected to be confirmed after the New York stock market opens on the 1st of next month.

Fed Governor Christopher Waller’s remarks are also scheduled for that day. Investors are likely to look for clues about the future interest rate path through Waller’s comments. Views among Fed officials on the outlook for rate cuts this year are divided. The Federal Open Market Committee (FOMC) maintained its forecast of three cuts this year, but individually, Austan Goolsbee, President of the Federal Reserve Bank of Chicago, expects three cuts, while Raphael Bostic, President of the Federal Reserve Bank of Atlanta, expects one, showing a difference.

Government bond yields are falling. The U.S. 10-year Treasury yield, a global bond yield benchmark, dropped 4 basis points (bp) from the previous trading day to 4.19%, and the 2-year Treasury yield, sensitive to monetary policy, fell 2 bp to 4.56%.

International oil prices are declining on news of increased U.S. crude oil and gasoline inventories. West Texas Intermediate (WTI) for May delivery is trading at $81.35 per barrel, down $0.27 (0.3%), and Brent crude for May delivery is trading at $86.09 per barrel, down $0.16 (0.2%).