In the US, everything is going as usual, recession fears are fading, and stock markets are returning to the greener side of the spectrum. In the last five trading days alone, the US stock market has recovered and provided investors with decent returns.
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Stock market performance in light of easing recession fears
Dow Jones Industrial Average, Nasdaq Composite and S&P 500 Index
The Dow Jones Industrial Average is up 1,100 points, representing a weekly gain of nearly 2.8%. The Nasdaq Composite climbed over 800 points in five days, adding nearly 5% on the charts.
In addition, the closely watched S&P 500 index rose more than 200 points, a gain of nearly 4%. This is the complete opposite of what happened earlier this month when stock markets crashed as fears of a U.S. recession mounted. The markets wiped out nearly $2 trillion in two days, and the carnage spilled over into Asian stock markets.
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Investors’ reactions
The knee-jerk reaction caused investors to sell their shares early, while others had the opportunity to buy stocks at discounted prices. Fears of a recession in the US are now minimal, and investor confidence has increased. If the upward momentum continues this month, markets could regain their lost ground.
JP Morgan adds fuel to the fire as US recession fears ease
Leading investment bank JP Morgan has added fuel to the fire by predicting that there is a 35 percent chance that the US will be hit by a recession in 2024. “This modest increase in our assessment of recession risk contrasts with a more substantial reassessment of our interest rate outlook; JP Morgan now sees only a 35% chance that the Federal Reserve and its colleagues will keep interest rates “high for the long term,” wrote the leading investment bank with economists led by Bruce Kasman.
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However, the markets have ignored JP Morgan’s warning and everything is going on as usual on the stock market. Fears of a recession in the US are a thing of the past because investors have become optimistic.
