Major US Stock Indices Touched Their Record High. Here’s What You Need to Know

<p>The year
2023 wasn’t fantastic for the stock markets, as other factors took the
spotlight. First, the US dollar dominated, followed by Bitcoin taking center
stage. Now, as we kick off 2024, and stock indices have surged to their
all-time peaks or close to them. Let’s find out how we’ve fallen in this state.</p><p>Stock
indices – the Nasdaq, the S&amp;P 500, and the Dow Jones – have experienced
substantial growth since the beginning of winter. And if you want to find out
which particular shares are currently outperforming others, you can check the
page featuring the <a href="https://www.tradingview.com/markets/stocks-usa/market-movers-gainers/" target="_blank" rel="follow">top stock gainers</a>.</p><p>The
chart above represents a moderately impressive hike. A 10% increase over almost
two months isn’t bad, though not something big-time. Simultaneously, the chart
below adds more allure to the situation. Since the beginning of 2023, the
Nasdaq index has soared by 60%. Just envision having an index-based fund in
your portfolio – those figures are quite appealing. The S&amp;P 500 and Dow
Jones results garner less attention but are still commendable.</p><p>Of
course, these performances can be compared to <a href="https://edition.cnn.com/2023/10/24/investing/bitcoin-price/index.html" target="_blank" rel="follow">Bitcoin's surge</a>, with the cryptocurrency
having already seen a 160% increase since the start of 2023. However, given the
well-known volatility of cryptocurrencies…</p><p>Plus, we
can't ignore the fact that the overall state of the world economy or certain
economic sectors isn't exactly robust (with perhaps artificial intelligence
being one of the exceptions). The stock market is on the rise as one of the
alternatives to the decline of the US dollar and US bonds’ yield. The chart
below illustrates the inverse correlation between <a href="https://www.tradingview.com/symbols/TVC-DXY/" target="_blank" rel="follow">the
Dollar index</a> and major stock indices over the past couple of years.</p><p>However,
the eye-catcher for investors these days is the <a href="https://www.reuters.com/markets/rates-bonds/major-central-banks-hold-rates-steady-markets-eye-rapid-cuts-2023-12-14/" target="_blank" rel="follow">stance of major central banks</a> and their
expressed views. Market participants hang on to every word from officials and
try to predict when regulators might begin lowering interest rates. </p><p>Major
central banks appear to be leaning towards a dovish policy. They consistently
suggest that markets can anticipate key rate reductions in the coming year at
every meeting. Any forecast hinting at an earlier-than-expected interest rate
decline tends to drive the stock market.</p><p>In
simpler terms, stocks may be rising even faster than the reasons for their
ascent become evident. If signals from new central bank announcements indicate
a delay in changes to monetary policy, it could adversely impact stock
investors' portfolios.</p>

This article was written by FL Contributors at www.forexlive.com.