As the closing bell rung on the Wall Street on Thursday, Dow Jones made a new closing high though a modest one for the sixth consecutive day. Dow ended the day at 20,619 points, which was just seven points higher than the previous day close, but was a new high no doubt. The other two indices NASDAQ and S&P 500 closed marginally lower ending their winning streaks. The day was mixed with stocks helping Dow to make a new high, but at the same time pulling down the other two indices ending their seven-day winning streaks.
Ever since Trump came to power, the market is inching north with the hope of getting policies favouring it from the new administration. Trump tweeted on this bullish run – “Stock market hits the new high with the longest winning streak in decades. Great level of confidence and optimism — even before tax plan rollout!”
There were reports released on Wednesday that indicated that the US economy is growing stronger and that too much above the expectations. The consumer price index rose by 2.5%, which is the highest in the last few years since March 2012 to be specific. The retail sales are strong and this data creates an optimistic environment for the Federal Reserve. The economists are of the opinion that fuelled by these positive numbers the central bank can increase the interest rates and there is a probability that it will do so at its very next meeting that happens to be in the month of March.
It is this confidence of investors on the growth capability of the country that is pushing the stock indexes to hit new high day after day. The US crude was up by 25 cents to hit $53.36 per barrel. There was, however, a reduction of 9 cents in contract on Wednesday.
Traders are vigilant about the level of a measure of volatility, which is often referred to as Wall Street fear index since the markets are already on an upswing from quite some time now. Yesterday alone, the VIX or the CBOE (Chicago Board Options Exchange) volatility index surged by 11% and is at its highest level, which indicates that investors are getting jittery and are not that confident if this rally will hold. The traders in such a scenario start taking precautions to cash in the profit to protect themselves from a possible crash.