Nasdaq Index, Dow Jones, S&P 500 News: Are Bullish Trends Set to Continue?

Quarterly Stock Market Performance

The first quarter of 2024 concluded with remarkable strength across major indexes. The S&P 500 led the charge, marking its most robust first-quarter performance in five years, and setting new closing and intraday highs. Small-caps showed their prowess by outperforming large-caps, with the Russell 1000 Value Index also registering impressive gains.

On Thursday, the blue chip Dow settled at 39807.37, up 47.29 or +0.12%. The benchmark S&P 500 Index finished at 5254.35, up 5.86 or +0.11% and the tech-heavy Nasdaq Composite closed at 16379.46, down 20.06 or -0.12%.

Sector and Index Breakdown

In an interesting turn, the equal-weighted S&P 500 Index outpaced its market-weighted counterpart, gaining 1.64% against 0.39%. The Dow, S&P 500, and Nasdaq all posted significant quarterly gains, fueled by rising optimism in AI-related stocks and anticipation of Federal Reserve rate cuts. The standout sectors included communication services, energy, and tech, while real estate was the only sector in retreat.

Economic and Corporate Highlights

The U.S. economy’s growth outstripped forecasts in the fourth quarter, buoyed by vigorous consumer spending. Labor market indicators remained robust, evidenced by positive initial jobless claims data. On the corporate front, Walgreens Boots and Home Depot were in the limelight with their financial disclosures and a landmark acquisition deal.

Consumer Sentiment and Bond Market Factor

Consumer confidence reports painted a mixed picture, with a slight dip in the Conference Board index but a 21-month high in the University of Michigan’s index. Bond markets, particularly U.S. Treasuries, enjoyed a favorable period, although the municipal bond market faced headwinds due to increased issuance and seasonal factors.

Market Activity and Fed Watch

Before the Good Friday market closure, trading was subdued, with expectations of increased activity due to portfolio adjustments by institutional investors. The upcoming PCE data release is keenly anticipated for insights into potential Federal Reserve rate cuts. Traders are factoring in a possible rate reduction by June.

Baltimore Port Closure Impact

The unforeseen shutdown of Baltimore’s key port, due to the Francis Scott Key Bridge collapse, has stirred economic uncertainty, especially in the automotive shipment sector. This event might have significant ramifications for trucking routes and the overall economy.

Short-term Market Forecast

Considering the robust quarterly performance of major indexes, solid economic data, and positive consumer sentiment, the short-term outlook for the market leans bullish. However, traders should closely monitor the developments around the Federal Reserve’s policy decisions and the unfolding situation at the Baltimore port, which could introduce some volatility. The approach to Dow 40,000 points to sustained investor confidence, supporting a bullish perspective in the near term.

Technical Analysis

The E-mini Dow Jones Industrial Average futures contract finished the daily, week, month and quarter on a high note on Thursday, putting the blue chip market in a position to reaffirm the uptrend with a breakout through its record high at 40316.00.

Although there is no true resistance on the daily chart, it’s not a bad time to consider protecting the downside. For your reference, a trade through 39657 will change the short-term trend to down. The intermediate trend is being controlled by the 50-day moving average at 39233.