What Did the Dow Do Today – an Analysis of the Day’s U.S. Stock Market Activity
Introduction
After the Dow Jones Industrial Average (Dow) ended the day with a gain of 436 points on Wednesday, traders and investors looked to today to determine if the stock market bounce would continue or if the index would slump back towards its value at the beginning of the week. As of Thursday afternoon, the Dow finished up by another 229 points. The immediate future of the U.S. stock market is still unclear, but here’s a closer look at what happened today and why investors responded the way they did.
Positive Economic Data Bolstered Consumer Confidence
One key factor that contributed to today’s stock market rebound was the Labor Department’s report on the second quarter job market. The frequent economic measure showed that unemployment rose by just 7.7 percent during the quarter, much lower than economists had anticipated. This news gave investors some reassurance that the U.S. economy is slowly but surely recovering from the effects of the coronavirus pandemic. Additionally, the Department of Commerce released data that showed new home sales increased by 8.7 percent to nearly a 12-year high. This added optimism to the market that the housing market is heading in the right direction.
Strong Tech Sector Performance
In addition to positive economic news, tech stocks had a very strong performance in today’s trading session. Among the top performers were Apple Inc (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc (NASDAQ:GOOGL), Intel Corporation (NASDAQ:INTC), and Tesla Inc (NASDAQ:TSLA). All five companies closed higher on the day, with Apple leading the way with a gain of 5.7 percent. These tech sector titans have been some of the driving forces behind the stock market’s strong gains in 2020 and continued to carry the load today.
What does the Future Hold?
The news of more jobs and higher home sales certainly buoyed confidence in the markets today, however, investors should not get caught up in one day’s activity. With the pandemic still far from over and potential revived trade tensions between the U.S. and China, today’s positive turn in the Dow’s performance could quickly sour. The stock market often jumps around on a daily basis, so investors should always remain cautiously optimistic when deciding what to do with their investments.