Markets don’t seem to be fighting the Fed anymore. They’re downright ignoring the central bank.
The S&P 500 rose 1.22% yesterday, closing at 4,425.84 — a level higher than where it was on March 16, 2022, when the Fed approved its first rate increase since 2018.
It’s as if markets are thumbing a nose at the Fed: Highest interest rates since 2007? Fastest hiking cycle in four decades? A skip, but followed by two more increases? Doesn’t matter.
Other major indexes rallied too. The Dow Jones Industrial Average added 1.26% and the Nasdaq Composite climbed 1.15%
It’s not just the pressure of interest rates that markets are defying. According to data from the Stock Trader’s Almanac, June’s historically a bad month for stocks, during which the Dow typically loses 0.2% and the S&P gains just 0.1%. We’re only halfway through June, but the Dow is already up 4.4% and the S&P 5.5%.
We have tech to thank for this year’s seemingly tireless stock rally, and on Thursday, the trend continued.
Microsoft, Oracle and Alibaba jumped at least 3%. In extended trading, Virgin Galactic — not to be confused with Virgin Orbit, which recently filed for bankruptcy — soared more than 40% after announcing its inaugural commercial space tourism flight will blast off later this month.
Everywhere, gravity is being defied. In spaceflight, that’s because of precise engineering. But in markets, rational explanations can be lacking, and that can be scary when you’re 10 feet off the ground.
