Markets Reach New All-Time Highs on Emerging Optimism

Traders work on the floor of the New York Stock Exchange in New York City on Nov. 2, 2023. Spencer Platt/Getty Images

Commentary

Last week was characterized by light holiday trading volume due to the July 4th holiday. Traditionally, the stock market rallies going into major holidays, as consumer and investor sentiment tend to improve. Last Tuesday, Fed Chairman Jerome Powell said he was pleased with how inflation had stopped rising after its rebound at the start of the year, but he also said it was too soon to say whether the Fed might be able to lower interest rates by the end of summer. At a conference with other central bankers in Portugal, Powell said, “We’ve made a lot of progress” as the labor market has “moved toward a better balance.” Speaking of the labor market, the monthly jobs report last Friday seemed positive on the surface, lifting the S&P 500 and NASDAQ to new all-time highs on holiday-shortened trading, but a closer look at the types of jobs and the huge revisions to the last two months’ data show how unreliable this initial report can be.