U.S. stocks wrapped up their best month since April, continuing an extraordinary rally fueled by stimulus from Washington, signs of economic revival and progress toward a coronavirus vaccine.
All three major U.S. stock indexes have climbed for five consecutive months after a brutal February and March that ended the longest bull market on record. The benchmark S&P 500 has surged 35% over that period, its largest five-month percentage gain since 1938.
The index advanced 7% for the month—its best August since 1986—but ended on a downbeat note, falling 7.70 points, or 0.2%, to 3500.31 on Monday.
The S&P 500 set records last week after the Federal Reserve signaled that it was likely to keep U.S. borrowing costs low for an extended period. Meanwhile, recent economic data, including July’s orders for durable goods, have surpassed economists’ expectations. The index is up 8.3% in 2020.
“They’ve confirmed lower-for-longer rates as far as the eye can see,” said Richard Dunbar, head of multiasset research at Aberdeen Standard Investments. “Alongside that confirmation of cheap money and cheap discount rates, we’ve just come through a U.S. earnings season that’s been a lot better than feared.”