S&P 500 records best first quarter since 2019 going into Easter break

A US Federal Reserve official has floated the idea of delaying or reducing interest rate cuts (MANDEL NGAN)
A US Federal Reserve official has floated the idea of delaying or reducing interest rate cuts (MANDEL NGAN)

The S&P 500 and the Dow closed at fresh records in New York on Thursday, with the former closing out its best start to the year since the Covid-19 pandemic ahead of the Easter break.

The Dow Jones Industrial Average ended at 39,807.37, up 0.1 percent and a new all-time high that lifted the index ever-closer to 40,000 points.

The broad-based S&P 500 advanced 0.1 percent to a new record of 5,254.35, while the tech-rich Nasdaq Composite Index slipped 0.1 percent to 16,379.46.

"We're continuing to grind higher," Art Hogan of B. Riley Financial told AFP.

He added that Thursday's records are indicative of a "broadening out" of the market rally beyond tech companies.

- Mixed European markets -

In Europe, London hit a one-year high while Frankfurt inched higher and Paris ended flat as traders continued to weigh the recent uptick in inflation ahead of fresh US figures on Friday.

European stock markets will be closed both Friday and Monday for a long Easter holiday. Wall Street will be closed on Good Friday but reopens Monday.

Asian indices closed mixed after a senior Federal Reserve official floated the idea of delaying or reducing cuts to US interest rates, boosting the dollar.

"In my view, it is appropriate to reduce the overall number of rate cuts or push them further into the future in response to the recent data," Fed Governor Christopher Waller told a conference in New York on Wednesday.

The yen steadied having hit a 34-year low against the dollar on Wednesday, while oil prices rose more than 1.5 percent on persistent concerns over the possibility of tight supplies.

Major stock markets "are still hovering around record levels, and market optimism remains high," said Pierre Veyret, analyst at ActivTrades.

"Investors continue to bet on upcoming rate cuts from central banks around the world."

The US Federal Reserve, the European Central Bank and the Bank of England have paused their rate hike campaigns as inflation has slowed -- although it remains elevated, fueling speculation on when they will start cutting borrowing costs.

- Starting to peter out -

A recent market rally has started to peter out as traders assess the outlook for US monetary policy, with a string of above-forecast inflation and economic data leading some to question whether the Fed can stick to its projection of three cuts this year.

"Nothing is settled when it comes to the timing of rate cuts in the US and elsewhere, and in our view this is the key theme that will drive markets," in the second quarter, said Kathleen Brooks, research director at XTB.

The US Commerce Department made a surprise upward revision Thursday to fourth-quarter GDP growth, to an annual rate of 3.4 percent, but analysts noted this was backward-looking information.

But it would reinforce the belief that the economy performed better than anticipated despite the Fed holding interest rates at elevated levels, said Patrick O'Hare of Briefing.com.

Attention now moves to the release Friday of the personal consumption expenditures (PCE) index -- the Fed's preferred gauge of inflation -- which is expected to show a slight rise.

- Key figures around 2000 GMT -

New York - Dow: UP 0.1 percent at 39,807.37 points (close)

New York - S&P 500: UP 0.1 percent at 5,254.35 (close)

New York - Nasdaq Composite: DOWN 0.1 percent at 16,379.46 (close)

London - FTSE 100: UP 0.3 percent at 7,952.62 (close)

Paris - CAC 40: FLAT at 8,205.81 (close)

Frankfurt - DAX: UP less than 0.1 percent at 18,492.49 (close)

EURO STOXX 50: FLAT at 5,083.42 (close)

Tokyo - Nikkei 225: DOWN 1.5 percent at 40,168.07 (close)

Hong Kong - Hang Seng Index: UP 0.9 percent at 16,541.42 (close)

Shanghai - Composite: UP 0.6 percent at 3,010.66 (close)

Euro/dollar: DOWN at $1.0789 from $1.0831

Dollar/yen: DOWN at 151.39 yen from 151.34 yen on Wednesday

Pound/dollar: DOWN at $1.2619 from $1.2641

Euro/pound: DOWN at 85.47 pence from 85.66 pence

Brent North Sea Crude: UP 1.6 percent at $87.48 per barrel

West Texas Intermediate: UP 2.2 percent at $83.17 per barrel