Wall Street closed with high hopes as the Dow Jones went up over 300 points to end the week. Major tech stocks led the way in the recovery.
The losing streak has ended for now as the Dow Jones Industrial Average up 358.52 points at 27,173.96. The S&P 500 and Nasdaq Composite also contributed upsides mostly done by the tech sector.
Shares of tech giants Amazon, Facebook, Apple, and Microsoft rose more than two percent. Aside from the tech sector, cruise operators also contributed at the end of week gains.
Carnival, Norwegian Cruise Line, and Royal Caribbean rose more than seven percent after Barclays analysts signaled investors that it’s time to buy cruise stocks.
Another massive stimulus package is being prepared by Congress and investors are also awaiting the next jobs report for the end of September.
Additionally, U.S. citizens are also anticipating the presidential debate so traders are expecting a lot of volatility in the Dow Jones moving forward.
The tech sector could maintain its bullish stance
Don Townswick, director of equities strategy for Conning expects tech stocks to attempt to reach new highs this October if earnings reports and company outlooks are positive as he told CNBC:
“We’re really seeing now a typical September, but under the hood we’re seeing what is potentially a rotation from the large tech stocks to a broader pool of stocks.”
Majority of the economists are expecting a slower pace of job growth for this month with a recent consensus forecast of 920,000 nonfarm payrolls compared to 1.37 million in August.
The recent fourth-quarter GDP forecast from JP Morgan economists was also adjusted from 3.5% to 2.5%.
The presidential debate may trigger more market volatility
However, despite the advanced speculations of the jobs report next week, Michael Schumacher, director of the rate strategy at Wells Fargo expects the upcoming debate to have more impact.
He said that if Trump is perceived to win, there is a chance for risk markets to rally. But if Biden wins the debate, it’s going to be a risk-off environment for the markets.
If the Dow Jones along with its other markets maintain its 200-period moving averages next week, investors and traders could either see a potential bounce off those levels or a massive sell down.
Images courtesy of Ramy Majouji/Flickr, TradingView