Warning of buying frenzy: Dow reaches new record, analysts see signs of overheating

Warning of buying frenzy: Dow reaches new record, analysts see signs of overheating

According to a report by www.n-tv.de,

On Wednesday, the head of the US Federal Reserve clearly indicated interest rate cuts in the coming year for the first time, which triggered a strong wave of purchases. This led to the Dow Jones Industrial climbing to another high and at times rising just below the 37,300 point mark. The Nasdaq 100 and the S&P 500 also approached their record levels. The Fed's statement provided clear signals for interest rate cuts in 2024. This decision triggered a remarkable wave of buying. The Dow Jones rose 0.43 percent to 37,248.35 points, the S&P 500 gained 0.26 percent to 4,719.55 points, and the Nasdaq 100 fell 0.15 percent to 16,537.83 points.

However, analysts are worried and see clear signals of overheating in the markets. Wall Street investors tend to be euphoric, which increases the risk of a setback in the stock market. Warning signs of overheating on Wall Street are increasing, which could indicate an impending correction. Investors will therefore need to keep a close eye on the performance of CNN Business' Fear & Greed Index and investor reaction.

On the raw materials market, the price of oil rose, while the dollar index fell by 0.9 percent. However, some companies, such as Adobe, saw declines due to disappointing forecasts, while others, such as Moderna, rose sharply due to positive cancer vaccine trial results.

It is important to note that current market movements show strong signs of overheating. Investors should therefore be cautious and be prepared for possible corrections. Reactions to the Fed statements and investor euphoria may continue to influence the market in the coming weeks and months.