The US stock market experienced a surge on Wednesday, fueled by a positive shift in market sentiment, as indicated by the CNN Money Fear and Greed Index. The index, which gauges market sentiment, moved further into the “Greed” zone, suggesting an optimistic outlook among investors.
This optimism was reflected in the stellar performance of US stocks. The Dow Jones Industrial Average closed at a record high, climbing by around 337 points to 43,077.70. The S&P 500 also saw gains, rising 0.47% to 5,842.47, while the Nasdaq Composite closed at 18,367.08, up 0.28%.
Driving the bullish sentiment were strong earnings reports from key companies. Morgan Stanley shares surged 6.5% after exceeding market expectations for both earnings and revenue. United Airlines also reported stronger-than-expected quarterly results, adding to the positive momentum.
However, while most sectors on the S&P 500 closed in the green, communication services and consumer staples stocks bucked the trend, closing lower. Utilities, financials, and real estate stocks led the gains on Wednesday.
The day’s economic data provided further insight into the market dynamics. Export prices in the U.S. declined by 0.7% month-over-month in September, exceeding market estimates of a 0.4% fall. Import prices also declined by 0.4% from the previous month in September.
Investors are now eagerly awaiting earnings reports from key companies like The Travelers Companies, Inc., Netflix, Inc., and Marsh & McLennan Companies, Inc. These results will provide further clues about the health of the broader economy and influence investor sentiment in the coming days.
The CNN Money Fear and Greed Index is a valuable tool for understanding market sentiment. It is based on the principle that fear exerts downward pressure on stock prices, while greed has the opposite effect. The index is calculated using seven equally weighted indicators and ranges from 0 to 100, with 0 representing maximum fear and 100 signaling maximum greediness.
The current reading of 69.6 indicates that market sentiment remains tilted towards greed, suggesting continued optimism and potential for further upside in the stock market.