The index trades in the 4430s up 0.6% and more than 5.5% over the week.
This would be the highest week of gains since November 2020.
The US equity market is on the front foot for the fourth consecutive session. The S&P 500 broke out at its highest level since the date Russia invaded Ukraine (February 24, 2014) in the 4430s. After a short dip below 4200, the main US index rose by 0.6%. This brings its weekly gain to over 5.5%. This means that the index is poised for its highest weekly gains since November 2020. Importantly, the S&P 500 has not traded in "correction" territory since the beginning of the week. It is now just 7.5% lower than the record highs set at the beginning of the year.
The Nasdaq 100 index has risen by about 1.4%. It is on track to post weekly gains around 7.5%. However, it remains 15% below November's record highs. The Dow was up 0.25 percent at the end of November and is on track for gains of about 5.0% per week, which brings it within 6.5% of its record-setting levels of 2011. The optimism surrounding alleged progress towards a Russo/Ukraine peace agreement was initially the driving force behind this week's equity market strength. Although the news reports on this have been mixed and conflicting in recent days, there is still hope for a ceasefire and that seems to be fueling optimism in the market.
Some traders may have been surprised at the rally in equities following a Fed policy announcement that was more hawkish than anticipated. However, after reflection, investors seem to believe that an aggressive approach to raising rates is necessary against the backdrops of high inflation and tight labor markets. Equities will continue to welcome future Fed policy shifts that are considered appropriate to maximize long-term US growth prospects.
The traders then turned their attention to Friday's gains. They attributed the strength of the news that Russia had avoided a historic default on a foreign debt payment. Others said that the call between President Joe Biden of the United States and President Xi Jinping of China was a positive sign, as both sides framed it as constructive. The US wants to persuade China to not provide military assistance to the Russians who have asked for it.
