![]() ![]() Market cap at least 8. ![]() “There is a path higher for stocks, but it is a narrow one and comes with risks: Economic growth can neither be so strong as to force the Federal Reserve into further hikes, nor so weak as to drive fears of a recession,” according to strategists at UBS. Will Zoom Video Communications be added to the S&P 500 - Quora Answer (1 of 19): It won’t be happening anytime soon. The Fed has pulled its benchmark rate up by a mammoth 5 percentage points from virtually zero at the start of last year, which has already helped cause several U.S. ![]() That could take a while with inflation still 4% last month, as measured by the consumer price index, and it’s hard for investors to predict what might break if rates remain high for a long period of time. He’s still expecting a downturn to hit in the second half of 2023 or early 2024, even if it’s “the most predicted and longest anticipated recession in recent memory.”Įven if the Fed soon stops hiking rates, it has pledged to keep them high to drive inflation down to its 2% goal. So far this year, the biggest 15 companies in the S&P 500 have gone up 34%, while the median company is up just 1%, according to Goldman Sachs.Ī pattern usually occurs in such cycles: In the last nine rate-hike campaigns by the Fed, seven have resulted in a recession, according to Darrell Cronk, president of Wells Fargo Investment Institute. It could also broaden out the market’s gains.Ī big concern this year has been how much of the S&P 500’s rise is tied to a handful of big stocks, particularly those benefiting from the artificial-intelligence boom. Powerful virtual meeting security Robust security settings help to ensure disruption-free virtual meetings, with encryption, role-based security, Passcode protection, Waiting Rooms, and more. The Fed has suggested only one or two more increases may be on the way this year.Īn economy that avoids a recession would support corporate profits, which are the lifeblood of the stock market. But the end of those hikes appears to be nearing as inflation has slowed since last summer. The Federal Reserve has hiked interest rates at a blistering pace to slow the economy in order to undercut high inflation. That’s offset weakness in such industries as banking and manufacturing caused by high interest rates. The job market has remained remarkably solid, helping consumers feel confident and willing to spend. Despite piles of predictions for a recession, the U.S. The S&P 500 stock market index is maintained by S&P Dow Jones Indices.It comprises 503 common stocks which are issued by 500 large-cap companies traded on American stock exchanges (including the 30 companies that compose the Dow Jones Industrial Average). ![]()
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