The Dow ended the second quarter with a 17.8% profit. This is the largest average quarterly rally since 1987. The S&P 500 had the biggest jump since 1998, rising nearly 20%. Meanwhile, the Nasdaq Composite jumped 30.6 percent for the quarter, its best performance since 1999.
The Wall Street jump came as a result of data showing that consumer confidence in the United States jumped the most in June since 2011, exceeding consensus forecasts for the economy.
“A combination of 1) Incentives, 2) Economic reopening and 3) Hope for a vaccine led stocks higher in Q2,” wrote Tom Essay, founder of The Sevens Report.
However, many investors remain cautious about the uncertain trajectory of the coronavirus pandemic and questions about how quickly large economies will recover from the acute shock. The United States, the world’s largest developed market, remains a matter of particular concern given the severe outbreaks of Covid-19 in several states.
In world news, Chinese President Xi Jinping signed a national security law for Hong Kong, which is due to take effect on Tuesday. The law could provoke tensions between the United States and China and threaten Hong Kong’s position as a financial center.
However, the Chinese economy is showing signs of recovery from the coronavirus pandemic. The PMI rose to a three-month high in June, surpassing economists’ estimates.
Junior Trader Daniel Dimitrov