The Dow Jones ended 220 points higher on Wednesday, gaining for the third day in a row, while the S&P 500 and the Nasdaq gained 0.7% and 1.2% respectively, adding a second day of recovery to their tally.
Optimism Sparks Relief Rally
Markets rose on hopes that the Iran war will end soon, which led to oil prices dropping overnight. The Brent has closed exactly at $100 a barrel, while the West Texas Intermediate has slipped below the mark of $90 a barrel in early Asia trading on Thursday.
The US Dollar index has also cooled off below levels of 100, while Gold continued its recovery amidst 35% odds of the US Federal Reserve cutting interest rates in December.
Futures this morning are in wait-and-watch mode ahead of US President Donald Trump’s address to the nation at 6:30 AM India time, where he will share operational updates of the Iran war.
Positive Macro Data
Macro data reported on Thursday was generally positive, with private payrolls indicating an addition of 62,000 jobs in March, higher than the 40,000 estimate, as per ADP data, while retail sales for the month of February were ahead of expectations. Manufacturing for March rose to the highest since 2022, even as input price pressures also jumped to a four-year high.
Most Analysts Cautious
Both JPMorgan and Goldman Sachs believe that the two-day rally has more to do with unwinding of negative positions in the market than a shift in sentiment regarding the war, while UBS said that it remains confident of the market ending higher from where it currently is by the end of the year and that the two-day move shows how quickly the market can recover if there is a resolution to the war.
The markets will remain closed for Good Friday but despite the holiday, the much awaited March jobs report will still be released tomorrow evening at 6 PM IST.
