After a difficult summer for equities, the months of September and October were generous to the global markets. US equities in particular have performed remarkably well. The biggest catalyst for these recent strong gains is the Fed's 50bps rate cut in September. The general view has also changed and further cuts, even large ones, are on the table and large rate cuts may be necessary. This has catapulted equity indices higher. The S&P 500 and Dow Jones Industrial Average continue to hit new highs on an almost daily basis. The S&P 500 surpassed 5,800 for the first time and nearly reached 5,900 in recent days. Similarly, the Dow Jones Industrial Average reached a new milestone by surpassing the 43,000 mark. Only the Nasdaq Composite has slightly missed its previous record high during these two months. However, the index is also very close to new record highs. Figure 1 shows the performance of the three indices throughout 2024. The Nasdaq Composite Index and the S&P 500 Index are both up nearly 25%, while the Dow Jones Industrial Average is up nearly 15%.
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