On Wednesday, stock prices increased as investors on Wall Street attempted to build on what has been a strong beginning to the year 2023.
The Dow Jones Industrial Average rose by 119 points, which is equivalent to a 0.4% gain. The S&P 500 experienced a gain of 0.7%, while the Nasdaq Composite saw an increase of 1.2%.
Alphabet (NASDAQ:GOOGL) shares rose more than 2% after Germany’s competition regulator announced plans to redesign Google’s options for opting out of cross-service user data processing.
Investors Are Buying Beaten-Down Tech Stocks
The changes came after the Nasdaq achieved its first winning streak of three consecutive days since the month of November on Tuesday. Investors have shown a willingness to buy beaten-down shares of technology companies in response to rising expectations that the Federal Reserve may alter its plan to gradually increase interest rates. In the nine months since September, a positive close on Wednesday would signal the beginning of its first four-day rally.
The rebound marks a shift from 2022 when the composite dropped 33.1% as worries over a probable recession prompted investors to choose value equities over growth firms. This caused the composite to decline by 33.1%.
Gina Bolvin, president of Bolvin Wealth Management Group, predicted that the price of technology stocks would rise as the Federal Reserve got closer to finishing its interest rate hike campaign.
Even while more volatile parts of the stock market, including technology, have seen a relief rally so far in 2023, many investors are still remaining wary as earnings season approaches, and the Federal Reserve is likely to continue hiking interest rates. For such a young year, each of these three averages is heading in the right direction.
Stock Markets Anticipate a Significant Move as US Inflation Data Approaches
On the basis of the trend that has emerged over the course of the last few weeks, stock investors are preparing themselves for potentially big changes and turbulent trading on Thursday, which will follow the publication of the first US inflation statistics for this year.
According to a poll conducted by Dow Jones, economists anticipate the index will show prices decreased by a marginal 0.1% in December compared to the previous month. The projection aims for a continuation of the 6.5% growth seen from the previous year. Economists anticipate that the consumer price index for December will be 0.3% higher than it was the previous month and 5.7% higher than it was a year ago when food and energy prices are excluded from the calculation.
In November and December, the Consumer Price Index (CPI) came 20 basis points lower than economists had forecast, and the market rallied on both occasions. However, the last time this occurred, the S&P 500 pared gains of as much as 2.8% during the regular trading session, and it ended the day just 0.7% higher.
A growing number of people are coming around to the idea that inflation has passed its previous high point. As a result, attention is shifting to the question of how low inflation would have to go before central banks would be willing to stop raising interest rates and possibly even assist markets during a recession.
The most recent readings on the US consumer price index handed the stock market a significant boost.
Each of the last three months following the release of CPI data has resulted in daily increases for both the S&P 500 and the Stoxx Europe 600 Indexes, as has been the case in four of the last five. Before that point, there had been a string of predominantly unfavorable market reactions in response to the growing number of indications of monetary tightening.
On Friday, the quarterly results of major banks will be released, marking the beginning of a new earnings season.
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