Just two weeks prior, the S&P 500 was at a six-month low due to many macroeconomic and geopolitical difficulties. US markets went through a turbulent period due to factors like rising yields, the Federal Reserve’s “higher for longer” policy, and the ongoing fighting in Gaza.

Amazing Comeback: $739 Billion in a Single Day

The US stock market experienced an unexpectedly quick and impressive comeback this week. The biggest spike happened on Tuesday, November 14, when US equities gained an astounding $739 billion in one trading day. November has seen the development of this strong rebound, supported by indications that macroeconomic pressures are lessening and increasing confidence about the Federal Reserve’s interest rate policy.

The most recent inflation statistics for October was also released, which added to the optimistic mood. The annual inflation rate dropped more significantly than anticipated in the consumer price index (CPI) report, coming in at 3.2% as opposed to the 3.3% analysts had predicted. Market confidence was bolstered by this statistic, which was a noteworthy decline from the 3.7% CPI published the previous month.

Wary of Persistent Difficulties

Prudence is still advised although the market has just experienced a notable rebound. Even with slowing down, the yearly inflation rate is still higher than the 2% target set by the Federal Reserve. Furthermore, federal funds rates remain at their highest points in 22 years, even with a recent halt to rate increases. As a sign that macroeconomic difficulties still exist, Federal Reserve Chair Jerome Powell has not ruled out the prospect of additional rate rises if they are judged necessary.

Even though the US stock market is rising, it’s too soon to say that a long-term bullish trend has begun. It is still a possibility that the US economy will have a recession in 2024. The current surge in stocks may be interpreted as a seasonal relief rally in Q4, and investors will probably need to exercise caution as they move through the year’s last stages.

The US stock market’s durability is demonstrated by the recent uptrend, which has occurred despite various obstacles and uncertainty. To determine the direction of the market in the upcoming months, investors will be closely observing events, such as the actions that the Federal Reserve will take in the future and the changing macroeconomic environment.