A week of evidence that the U.S. economy’s ill health may have been overstated and dovish talk from the Federal Reserve is putting the possibility of stocks at an all-time high back on the table for American investors.
Gains on Friday capped an eight-day rebound that restored $1.4 trillion of market value to U.S. shares that was erased in the aftermath of the U.K. vote to leave the European Union, with the S&P 500 Index rallying after stronger June payroll growth calmed concerns sown by May’s anemic number. The benchmark gauge is sitting less than half a percent from its all-time high of 2,130.82, reached in May 2015.
Starting with a report Wednesday showing service providers expanded in June at the fastest pace in seven months, and continuing with Fed minutes that indicated less urgency in the need to raise interest rates, investors have been treated to enough good news to put the Brexit trauma behind them. Friday’s rally pushed the S&P 500 to its highest level since July 21, 2015.
Banks and automakers were among the strongest performers today, with Goldman Sachs Group Inc. and JPMorgan Chase & Co. increasing more than 2.2 percent. General Motors Co. climbed 3.2 percent, on track for the most in almost three months. The S&P 500 added 1.3 percent to 2,125.49 at 1:26 p.m. in New York. The Dow Jones Industrial Average rose 220.86 points, or 1.2 percent, to 18,116.74, near a three-month high. The Nasdaq Composite Index advanced 1.5 percent.