The three major U.S. stock indices and related exchange traded funds hit new intraday record highs as traders trimmed bets on a Federal Reserve rate hike and oil prices continued to recover.
On Monday, the SPDR S&P 500 (NYSEArca: SPY) was up 0.4%, PowerShares QQQ (NasdaqGM: QQQ), which tracks the tech heavy Nasdaq-100 Index, was 0.6% higher and SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) added 0.4%. All three ETFs touched new all-time highs, along with the underlying benchmark indices.
The S&P 500 was up 0.4% after hitting a high of 2193.81. The Nasdaq gained 0.6% after hitting a new record of 5269.93. The Dow was 0.4% higher and set a new intraday record of 18668.44, USA Today reports.
Over the past month, traders have found strength from global central banks, which have continued to show they will throw additional stimulus and looser monetary policies into the system on any signs of weakness. U.S. equities have also slowly inched higher toward new highs on the better-than-expected second quarter corporate earnings season.
“Stocks have retained a hot pitch and there’s a lot of demand for equities,” Andrew Brenner, the head of international fixed income for National Alliance Capital Markets, told Bloomberg. “The question is how you make money in a low interest rate environment, and equities might be expensive, but they’re the least dirty shirt.”
The shift back into stocks has also helped SPY, the largest ETFs on the market, break the $200 billion mark, again. SPY previously broke the $200 billion assets under management level in 2014, but investors pulled out in 2015, with SPY ending the year at $182.0 billion in AUM.
The markets were buoyed Monday by energy stocks on speculation that the Organization of the Petroleum Exporting Countries are considering a production freeze, which bolstered crude oil prices. West Texas Intermediate crude oil gained 2.3% to $44.5 per barrel.
Moreover, traders were reducing bets of a Fed rate hike this year ahead of the release of FOMC minutes for the Federal Reserve’s July meeting on Wednesday.
“The market really has not moved to price in any more chance of Fed tightening,” Daniel Katzive, head of foreign-exchange strategy for North America at BNP Paribas SA, told Bloomberg.
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