The positive consumer data has helped the US stocks to enjoy some gains after a losing streak last week. The consumer confidence, according to the consumer data increased to reach a 16-year high. This helped the energy and financial shares to end up with gains. S&P 500 index reached its highest in two weeks after the release of the US consumer data. The Dow Jones Industrial Average also recovered from a consecutive eight-day loss, which is the longest losing period for the stocks since 2011.
The February consumer data was revealed which showed that the consumer confidence increased greatly. The labor market also showed modest improvement and the trade deficits have declined sharply. Other data also showed that the house prices have started to increase in January, which is an indication of a strong economy. After the Presidential election win by Donald Trump, the optimism and confidence are pretty high, which showed the resilience of the markets.
The Dow Jones Industrial Average gained 0.73% to 20,701.5 and the S&P 500 index also gained 0.73%. In the past week, the stock market became hopeless as Trump failed to move his health care bill in the GOP. The setback in Trump’s agenda, caused the stock market to crash. However, investors shrugged it off as the US consumer confidence increases. Investors are still hopeful that Trump’s promised tax cuts would trigger great economic growth. This has been one of the primary reasons for the stocks soaring high after Trump took his office at the White House.
The failure of health care reform could mean that the Trump administration will quickly shift the focus on tax cuts. The staff is expected to bring out the perfect plan for tax cuts so that it is approved by the Congress. The gains of the S&P 500 index were mainly due to the increase in demand for the energy and financial shares. The financial sector gained 1.45 and the energy shares gained 1.3%. The S&P 500 index was also supported by the shares of Apple, General Motors, and Tesla. The best performer was Darden Restaurants which gained 9.3% in a single day.
The gains experienced by the energy shares were also reflected in the price of crude oil. The crude oil reached $48 per barrel, showing some signs of recovery. The yields of 10-year Treasury bonds also increased. The White House administration is keen on going forward with the tax reforms. The Federal Reserve has also indicated that there will be at least two more interest rate hikes in the upcoming months.
The stock markets of Asia also gained significantly, reflecting the improvement in Wall Street stocks. The disappointment regarding the failure of health care bill died down quickly as the investors renewed their hopes for tax cuts and deregulations. South Korean Kospi index gained 0.1% while Hong Kong’s Hang Seng Index increased by 0.3%. Nikkei index of Japan also increased by 0.1%. The ASX 200 Australian index gained 0.8%. The Shanghai Composite Index, on the other hand, lost 0.20%.