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The Federal Reserve Chairman Jerome Powell noted on Thursday that the economy is yet to see a well-rounded recovery from the pandemic.
The United States stock market saw yet another positive close to Thursday’s market session as the Nasdaq Composite leads the gains after surging 1.03%, adding 140.47 points to 13,829.31. Not only Nasdaq Composite (INDEXNASDAQ: .IXIC) is in green. The Dow Jones Industrial Average (INDEXDJX: .DJI) recorded a 0.17% growth to 33,503.57. The S&P 500 Index (INDEXSP: .INX) soared to 4,097.17, a new high after recording a 0.42% surge.
The major tech stocks fueled this rally as gains permeated the industry. While Apple Inc (NASDAQ: AAPL) closed 1.92% to $130.36, the shares of electric vehicle maker Tesla Inc (NASDAQ: TSLA) grew 1.91% to close at $683.80. Microsoft Corporation (NASDAQ: MSFT) jumped 1.34% to $253.25, and the positive performance spread out to e-commerce giant Amazon.com Inc (NASDAQ: AMZN) which leaped 0.61% to $3,299.30.
While the latest job reports were worse than anticipated with a total of 774,000 new job claims, investors are confident that the progressive trajectory of the reopening economy will level out this negative trend in the coming weeks as more people return to their jobs.
“The jump in jobless claims is disappointing but doesn’t change our view that the next few months will see huge job gains as the economy continues to reopen,” said Jeff Buchbinder, equity strategist at LPL Financial. “In fact, it wouldn’t shock us to see employment return approach pre-pandemic levels by the end of this year.”
Additionally, the Federal Reserve Chairman Jerome Powell noted on Thursday that the economy is yet to see a well-rounded recovery from the pandemic.
“The recovery remains uneven and incomplete,” Powell said Thursday in an IMF-backed virtual event. He added, “This unevenness that we’re talking about is a very serious issue.”
Inflation to Remain at 2%, President Biden Open to Negotiating Tax Hike
Chairman Powell also emphasized the attempts by the Federal Reserve to deploy tools within its reach to help return inflation back to the 2% benchmark amid near-term price pressures.
“We don’t think that’s the most likely outcome but we do have the tools to deal with that outcome. We will use them to guide inflation back to 2% if the need arises. In the most likely case, this period will show temporarily higher prices but not persistent inflation,” He said.
In line with his $2 trillion infrastructure plan and the Republican’s planned antagonism against the corporate tax hike, President Joe Biden is reportedly open to negotiating the tax increment from the proposed 28%.
The US stock market remains generally healthy as the major indices have trailed a consistent gain for the past 4 quarters. As the vaccination program intensifies, life to how it was pre-pandemic is highly anticipated and broader economic health can fuel another major positive close this quarter.