The Nasdaq Composite Index is on track for its best year since 1999, with a gain of more than 23%, helped by strong growth in the technology sector. The S&P 500 Index is also up more than 20% for the year, and the Dow Jones Industrial Average has gained more than 14%. All three indexes are on track to close out the year with gains, despite a number of challenges, including the war in Ukraine, rising inflation, and the Federal Reserve’s tightening of monetary policy.
The strong performance of the stock market has been fueled by a number of factors, including strong economic growth, improving corporate earnings, and a favorable interest rate environment. The technology sector has been a particularly strong performer, as investors have bet on the continued growth of the digital economy.
The bond market has been more volatile, as investors have grappled with the Federal Reserve’s tightening of monetary policy. Yields on long-term Treasury bonds have risen, but they are still relatively low by historical standards. The yield on the 10-year Treasury note is currently around 1.5%.
Inflation remains a major concern for investors, as it erodes the purchasing power of money. The consumer price index rose 7% in the year to November, the fastest pace in 40 years. The Federal Reserve has said that it will continue to raise interest rates until inflation comes down to its 2% target.
The war in Ukraine has also weighed on investor sentiment, as it has led to increased uncertainty about the global economy. The conflict has also disrupted supply chains and caused energy prices to rise.
Despite the challenges, the stock market is currently on track for a strong year. Investors are optimistic about the outlook for the economy, and they are betting that the Federal Reserve will be able to tame inflation without causing a recession.
Here are some additional market highlights:
- The S&P 500 Index rose 0.2% on Friday to close at 4,719.15.
- The Nasdaq Composite Index rose 0.6% to close at 15,677.13.
- The Dow Jones Industrial Average rose 0.5% to close at 36,482.07.
- The 10-year Treasury note yield fell to 1.47%.
- The dollar index rose to 100.12.