Consumption growth boosted US stock indexes

The Dow Jones index strengthened by 0.11 percent to 34,128 points, while the S&P 500 rose by 0.28 percent to 4,147 points and the Nasdaq index by 0.92 percent to 12,070 points, reports Mina.

Support for the market was provided by the report that turnover in retail trade in the United States of America increased by three percent in January, while analysts expected growth of 1.8 percent.

Analysts say that strong spending growth shows the economy is resilient and could avoid a recession.

On the other hand, the obstacle to the market is still high inflation, which is why they estimate that the American central bank will raise interest rates at least twice, in the range of five to 5.25 percent.

“Consumption data showed that the economy is still strong. However, it suggests that the Fed’s final interest rate will be higher than expected and that there will be no interest rate cuts this year,” explained Ross Mayfield, strategist at Baird.

Investors putting hope in Fed

Since the beginning of the year, stock prices have risen strongly as investors hoped that the Fed could end the rate hike cycle with the key interest rate below five percent and that at the end of this year, when inflation eases, the rate cut cycle could begin. However, the new data does not indicate that.

The quarterly business results of companies are also the focus of investors. So far, more than half of the companies in the S&P 500 index have published their reports, with almost 70 percent reporting higher-than-expected profits.

Analysts estimate that company earnings in last year’s last quarter fell annually.

Share prices also rose on European stock exchanges. The London FTSE index gained 0.55 percent to 7,997 points; the Frankfurt DAX rose 0.82 percent to 15,506 points; and the Paris CAC rose 1.21 percent to 7,300 points.