Despite volatility, Wall Street managed to record a fifth consecutive session of increase on Thursday, thanks to the rise of the industrial and real estate sectors. The distribution and airlines, however, suffered losses after disappointing earnings announcements. Fed Chairman Jerome Powell briefly pushed the indexes in the red, after talking about a significant reduction in the US central bank’s balance sheet. Powell said the US central bank could be patient with further raising interest rates and its main concern is the weakening global economy.
At the close, the Dow Jones index gained Wednesday 0.50%, barely regaining the level of 24,000 points, while the broad S & P 500 index rose 0.45% to 2,569 pts, and the composite Nasdaq gained 0.42% to 6,986 pts.
Since the beginning of the year, indices have now advanced 2.9% (Dow Jones), 3.5% (S & P 500) and 5.3% (Nasdaq) after falling in 2018 for the first time in 10 years in 2008. Last year, the Dow Jones lost 6.4%, the S & P 500 5.6% and the Nasdaq lost 3.9%.
Powell stated that the Fed will adopt a wait-and-see approach with the interest rate policy and will look at the situation for the time being. It examines how the global economic risks affect the US economy, according to Powell. He further said that the financial markets are more pessimistic about a possible economic recession than the Fed.
Furthermore, the shutdown of the American government continued to hang above the market. President Donald Trump has abruptly abandoned a meeting with representatives of the Democrats about the construction of a wall at the border with Mexico. It was a “total waste of time,” Trump wrote on Twitter. The battle over the boundary wall that Trump wants is the reason for the shutdown, which has stopped parts of the government since Christmas.