U.S. stocks are holding near record highs as they approach the final stretch of what appears to be another winning month. The S&P 500 edged 0.2% higher in early trading, following its recent all-time high close. The Dow Jones Industrial Average also rose by 0.2%, while the Nasdaq composite gained 0.1%.
Berkshire Hathaway provided a boost to the market after reporting stronger-than-expected results for the end of 2023. Warren Buffett’s company, known for its subsidiaries like GEICO and Fruit of the Loom, saw its Class-B shares rise by 2.7%.
Despite this positive news, Buffett cautioned shareholders against expecting further “eye-popping performance,” noting a lack of bargains in the current market. This sentiment reflects broader concerns among financial analysts that prices across Wall Street have become too high following the market’s strong rally since Halloween.
The S&P 500 is poised to mark its fourth consecutive winning month, following its 15th winning week in the last 17. The market rally, which began in October, was driven by hopes that easing inflation would prompt the Federal Reserve to cut interest rates multiple times this year, easing economic and financial pressures.
While expectations for rate cuts remain high, traders have delayed their forecasts following stronger-than-expected economic reports. However, this data has also raised hopes for stronger profit growth, which supports stock prices.
Domino’s Pizza saw its stock surge by 8.5% after reporting fourth-quarter profits that exceeded analysts’ expectations. Meanwhile, Amazon’s stock remained stable after its inclusion in the Dow Jones Industrial Average, replacing Walgreens Boots Alliance.
Last week, Nvidia’s strong earnings report further fueled excitement around artificial intelligence technology, boosting the stock by 1.7% on Monday and contributing to its nearly 62% year-to-date increase.
While earnings reporting season for S&P 500 companies is winding down, this week will still see updates from several major names. Reports from Best Buy, Lowe’s, TJX, Salesforce.com, and HP will provide insights into U.S. household spending and overall economic health.
On the economic calendar, Thursday will see the release of the U.S. government’s preferred measure of inflation, which could impact market volatility. Wall Street hopes that inflation will continue to cool, potentially leading the Federal Reserve to begin cutting rates by June.
Bond yields remained steady, contributing to the calm in the stock market. The 10-year Treasury yield held at 4.25%. Internationally, Japan’s Nikkei 225 set another record, while other Asian and European markets showed mixed or modest movement
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