Nasdaq Hits Record High As Amazon, Apple Shares Jump

The stock market finished lower on Tuesday—although the Nasdaq Composite rallied to a new record high—a day after the S&P 500 turned positive for 2020 and fully recouped its losses from the selloff caused by the coronavirus pandemic.

 

CRUCIAL QUOTE

The job gains from last week “indicate the reopening of state economies has been successful in putting millions back to work, with leisure and hospitality leading the way,” according to Wilmington Trust chief investment officer Tony Roth. “However, the unemployment rate continues to understate the true level of labor market disruption, as a number of categories of workers who have lost their jobs are not currently counted in the unemployment rate due to technical issues with how the data are measured.”

 

KEY BACKGROUND

The S&P 500 rose 1.2%—turning positive for the year—on Monday, while the Dow Jones Industrial Average was up 1.7%, around 450 points, and the tech-heavy Nasdaq hit a new record high, gaining 1.1%. The market has now broken back above a crucial milestone, with both the S&P 500 and Nasdaq having fully recovered their losses from the coronavirus selloff earlier this year. Stocks have gotten a tremendous boost since Friday, after the biggest monthly job gains on record: The U.S. economy surprisingly added 2.5 million jobs in May, versus an expected loss of over 8 million jobs. The market has so far had a strong start in June, building on back-to-back monthly gains. Both the Dow and S&P rose more than 4% in May, after rallying more than 11% in April. The S&P is now up over 45% from its coronavirus crisis-level low on March 23, 2020.

 

WHAT TO WATCH FOR

The Federal Reserve begins its two-day meeting on Tuesday. Investors will be closely watching for any new forward guidance on the economy and how long the Fed plans to keep interest rates low.