S&P500 Rises to a New Record, Dow Slips on J&J Vaccine Halt

14 Apr 2021 · 3rd Party Analysis

WRITTEN BY ThorFX

S&P500 Rises to a New Record, Dow Slips on J&J Vaccine Halt

In Summary

  • S&P500 continues to break records, pushes to 4,141 propelled by a tech rally
  • Futures keep steady near unchanged levels, slightly negative

US stocks traded mixed but mostly higher on Tuesday as investors assessed if the Johnson & Johnson vaccine pause will impact the reopening of the economy. In addition, market participants also digested the March inflation report, which was not as bad as some traders expected.

The Dow Jones Industrial Average wobbled on Tuesday as injections of Johnson & Johnson’s single-shot coronavirus vaccine came to a sudden halt across the US. The reason being, health authorities called for a temporary pause after several rare blood clotting cases emerged one to three weeks following the vaccination.

The 30-stock index declined moderately by 68.13 points, or 0.20%, to finish the trading session at 33,677.27. J&J shares, present in the benchmark index, closed lower by 1.3%. Initially, the stock reached a one-month low but later was buoyed by investors and recovered some losses.

The S&P500 ticked higher, up 13.60 points, or 0.33%, to 4,141.59. The slight climb was enough for the broad-based index to set a new record, prompted by the continued optimism that has been carrying the S&P500 to new heights in recent weeks. The Nasdaq Composite marched higher by 146.10 points, or 1.05%, to a close of 13,996.10. The tech-heavy index is now about 100 points away from its all-time record in February this year.

Tech Stocks Make a Comeback

In a rather quiet session, high-flying tech stocks enjoyed renewed buying appetite. Shares of Apple climbed 2.43%, while Microsoft advanced 1% and Amazon gained 0.60%. The EV maker Tesla jumped 8.60%, breaking the $700 mark for the first time in about a month. As the earnings season unfolds, investors seem to have high expectations for the electric car company. The stock closed Tuesday’s session at $762.32 a share.

While the J&J vaccine pause may cause some short-term volatility and uncertainty, investors remain confident that fundamentals are strong and the US is on its way to complete economic recovery. In addition to the unexpected vaccine news, the monthly gauge for inflation was released yesterday. The consumer price index, one of Wall Street’s most preferred ways to measure inflation, climbed 2.6% over the previous 12 months and marked an increase by 0.6% in March from February. The CPI index, released by the Labor Department, measures what consumers pay for everyday goods. The annual increase was the biggest since August 2018.

The core CPI, which excludes food and energy, rose 1.6% over the year ended March and was higher by 0.3% in March from February. The spike in both indicators marks the start of an anticipated pickup in inflation that, according to the Federal Reserve, should not exceed 2.4% by year-end and should fall back to 2% next year.

Meanwhile, the cryptocurrency market came back roaring with bitcoin breaking above $64,000 for the first time in history. The world’s largest digital token popped more than 2% early Wednesday, continuing

the 6% rally on Tuesday. The crypto asset reached an all-time high of $64,500. Stock futures on Wednesday are fairly muted and slowly turning positive

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