US stock ETF rally extends for fourth week

You.S. markets and exchange-traded funds are on a hot streak, extending gains for the fourth straight week, after inflation turned weaker than expected and fueled bets that the Fed will take a more moderate stance on its monetary policy outlook.

Friday, the Invesco QQQ Trust (QQQ) increased by 1.4%, the SPDR Dow Jones Industrial Average ETF (DIA) increased by 0.8%, and the SPDR S&P 500 ETF Trust (SPY) was 1.1% higher. Additionally, DIA was testing its long-term resistance at the 200-day simple moving average.

The recent slowdown in consumer prices could allow the Fed to reverse its previously aggressive policy of raising interest rates, giving the economy more leeway to maintain growth or reduce fears of recession. .

“Investors are eternal optimists and will focus on the good and ignore the bad,” Oanda analyst Craig Erlam told The Wall Street Journal.

Meanwhile, the better-than-expected quarterly earnings season and strong jobs numbers also helped fuel the recent rebound in US equities.

“The economy isn’t falling off a cliff, but there are some worrying signs. Still, the bulls may point to a very strong job market and corporate earnings that don’t suggest a downturn is hurting corporate profits,” Lindsey Bell, chief markets and financial strategist at Ally, told Reuters.

“Stocks large and small have rallied impressively over the past two months despite a very mixed set of economic data,” Bell added.

Samy Chaar, chief economist at Lombard Odier, presented a more optimistic global outlook, pointing to several factors such as lower commodity prices, lower shipping rates and an improving Chinese economy.

“The big question here is, does this morph into a more fundamental type of rally? Chaar asked the WSJ.

The rebound in US equities also helped broad benchmarks push toward long-term technical signals that could further support momentum.

“Major indices are trading near highs dating back to May and June and these highs are now serving as short-term resistance,” Adam Sarhan, managing director of 50 Park Investments, told Reuters.

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