With expectations high, billionaire hedge fund manager Paul Tudor Jones warns that one wrong move or comment from Fed Chairman Jerome Powell could trigger a sell-off in risk assets.
The US stock market started the week with impressive gains, with the Nasdaq Composite (INDEXNASDAQ: .IXIC) hitting a new all-time high (ATH). The technology-heavy benchmark index closed Monday’s session up 12.54%, adding 1,579.08 points to close at a six-month high of 14,174.14. The current performance surpasses the 14,095.47 points set on February 12, and the previous peak of 14,138.78 reached on April 26.
The Nasdaq Composite Index’s growth had a knock-on effect on the S&P 500 (INDEXSP: .INX), with the broader index up 0.18% at 4,255.15. Among the main indices, only the Dow Jones Industrial Average recorded a slight trend reversal, declining by 0.25% to 34,393.75. While the 30-stock Dow Jones lost 0.8% over the past week, the Nasdaq Composite and S&P 500 gained 1.9% and 0.4% respectively.
“The modest performance of the overall market is very much in line with historical patterns in particular, the June trend of generally quiet trading,” said Chris Larkin, managing director of trading at E-Trade Financial. “As the market continues to sort through potential Fed action and impending inflation, we may continue to see this narrative play out in the near term.”
Nasdaq Composite ATH: growth fueled by Fed expectations
Investors in the US stock market are turning to growth stocks as expectations of bullish statements come from the Fed ahead of the proposed two-day policy meeting. While the Federal Reserve is not expected to change its stance on raising interest rates until 2023, according to a Wall Street Journal report on Monday, investors are hoping that some outcome of the meeting will eventually move the market.
While expectations are high, billionaire hedge fund manager Paul Tudor Jones warns that one wrong move or comment from Fed Chairman Jerome Powell could trigger a sell-off in risk assets.
The Nasdaq Composite reached its ATH against a backdrop of technology stocks that enjoyed impressive runs on Monday. Electric carmaker Tesla Inc (NASDAQ: TSLA) jumped 1.28% to $617.69 per share. Apple Inc (NASDAQ: AAPL) gained 2.46% to $130.48, while Microsoft Corporation (NASDAQ: MSFT) jumped 0.78% to $259.89.
