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The S&P 500 and Dow Jones Industrial Average closed at record highs on Friday, with the Dow exiting correction territory for the first time since late 2022. The S&P 500 gained 1.2% to 5,340, while the Dow rose 1.1% to 39,600, driven by strong performance in tech stocks and a rebound in the Nasdaq. Market optimism was fueled by improved corporate earnings and expectations of a pause in Federal Reserve rate hikes. The Nasdaq Composite added 1.5%, supported by AI-related stocks like NVIDIA and AMD.
This rally signals renewed investor confidence in growth sectors amid easing inflation concerns. Traders are closely watching the Fed's stance on interest rates, with the 2-year Treasury yield dropping to 4.3% as markets price in a potential rate cut in 2024. The move also highlights the resilience of tech stocks, which now account for over 30% of the S&P 500's weighting. For global markets, the US equity rebound could attract capital inflows to risk-on assets.
MENA investors should monitor the Fed's upcoming policy decisions and the sustainability of tech sector momentum. The S&P 500's 200-day moving average at 5,200 remains a critical support level. If the index holds above this level, it could confirm a bullish trend. Conversely, a breakdown might trigger a retest of the 5,000 psychological barrier.
