The United States stock markets saw a positive performance in May, despite some initial concerns. The S&P 500 index rose by 4.8 percent, reaching a historical high of 5,321 on May 21, 2024. The Dow Jones Industrial Average also increased by 2.3 percent, while the NASDAQ index saw a significant rise of 6.9 percent.
Investors were initially worried about the Federal Reserve’s stance on interest rates due to concerns about inflation. However, after the release of the PCE price index, which showed a modest increase in prices, investor confidence grew. This led to expectations that the Fed would lower its policy rate of interest at least once before the end of 2024.
The positive market response was also influenced by strong consumer spending, high home prices, and overall economic stability. Despite the upcoming presidential election, Federal Reserve officials aim to maintain market calm and stability by keeping their monetary policy relatively unchanged for the rest of the year.
With a 10.4 percent rise in the S&P 500 index in the first five months of 2024, Federal Reserve officials hope to see a similar market response in the second half of the year. By avoiding major disturbances to the economy and staying out of the headlines, they aim to keep investors and the public from speculating on their future moves.
Overall, the stock markets are expected to remain stable and continue their upward trend, with the Federal Reserve working behind the scenes to ensure a smooth transition into the second half of 2024.
