The stock market’s benchmark index, the S&P 500, has posted its “best day since November 2022,” after seeing a rise of more than 2.3% in the last trading session as it recovers from a significant drawdown seen earlier this month.
According the economics outlet Kobeissi Letter on the microblogging platform X (formerly known as Twitter), the S&P 500 index added more than $1 trillion to its market capitalization in a single day as equities markets kept on recovering from a recent downturn.
BREAKING: The S&P 500 officially posts its best day since November 2022. pic.twitter.com/YY5e6H9XWt
— The Kobeissi Letter (@KobeissiLetter) August 8, 2024
The equities market sell-off came over a confluence of various factors, including investors concerns surrounding economic growth and the potential overvaluation of artificial intelligence.
Economic data in the United States has started pointing to a potential recession after worst-than-unexpected unemployment data triggered what’s known as the Sahm rule, an indicator that measures the three-month moving average of the U.S. unemployment rate against its previous 12-month low.
Meanwhile, rising tensions in the Middle East exacerbated investor anxiety as Iran is expected to soon attack Israel in response to the killing of Hamas’s leader Ismail Haniyeh in Tehran.
The recovery has seen some suggest it could be a dead cat bounce, the term used for a short-lived recovery in an asset’s price within a longer-term downtrend.
As reported, a “concerning” economic indicator in the United States is currently pointing to an incoming recession after accurately predicting the last recessions over the last 75 years accurately.
That indicator, the US unemployment rate has now risen for four consecutive months, its longest growing streak since the 2008 Financial Crisis.
The rate has risen from 3.8% in March to 4.3% in July, its highest level since October 2021, and per the outlet every time the US unemployment rate rose for four months straight over the last 75 years, the country’s economy entered a recession.
Meanwhile the flagship cryptocurrency Bitcoin has recovered from a low below the $50,000 mark to now trade above $60,000 once again. The cryptocurrency is still down significantly from an all-time high above $73,000 seen earlier this year.
Notably, Bitcoin is teetering on the brink of a bearish technical pattern known as the “death cross.” A death cross occurs when a short-term moving average drops below a longer-term moving average, in this case the cryptocurrency’s 50 moving average is dropping below its 200 moving average.
Market observers pointed out that in October 2023, Bitcoin also faced a death cross where the short-term moving average crossed below the long-term moving average, but it was quickly inverted as the price of the cryptocurrency started surging.
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