The stock market continues to put up numbers that have investors excited. U.S. stock indexes, particularly growth stocks, have been leading the charge. It appears that the market is faring well and the upward trajectory looks to stay on course.
The Dow Jones Industrial Average, S&P 500 index, and Nasdaq Composite index are all at record levels. The S&P 500 is up a whopping 23.2% for the year and the Dow has increased 14.6% since the beginning of the year. The Nasdaq Composite has risen 25.9% year-to-date.
It’s no secret that growth stocks have been driving this rally. Primarily, large tech companies in the internet, software, and communications niche have seen particularly impressive gains. This group of stocks has powered the Nasdaq’s incredible returns.
In fact, the Nasdaq’s return has even left the Dow Jones Industrial Average, which is made up of major blue-chip stocks, in the dust. It’s clear that the market is currently favoring growth stocks.
Other contributing factors to the stock market’s impressive track record this year have included strong growth out of China and other emerging markets. Trade tensions between U.S. and China have eased in recent months, providing a boost to riskier assets like stocks.
Lower-than-expected unemployment numbers in the U.S., strong retail sales figures, as well as gains in the housing market have helped to fuel the stock market’s strong performance. The Federal Reserve’s dovish stance on interest rates, with speculation of a rate cut on the horizon, has been a boon to the stock market as well.
The positive market sentiment, coupled with strong fundamentals, has propelled the major U.S. stock indexes to record highs. It appears that growth stocks, in particular, will remain in the lead as long as the market maintains its current trajectory.