Analysts at Citigroup reported on Monday that investor optimism toward U.S. stocks remains strong, despite the noticeable decline in market momentum recently. These analysts suggest that this slowdown in momentum reflects somewhat cautious expectations among investors, even as the possibility of easing U.S. monetary policies looms in the coming months.
Despite a slight increase in bullish positions, risks remain evident, particularly in the Nasdaq, where 79% of long positions are currently experiencing losses. Although these losses are relatively small, Citi warns that a further drop below the 19,000 level could significantly amplify losses and increase selling pressure.
On Friday, U.S. stocks saw a notable rise, with the Dow Jones Industrial Average hitting a new record high, buoyed by investor optimism at the end of a volatile month. The Dow rose by 228.03 points, or 0.55%, closing at 41,563.08 points.
Similarly, the S&P 500 climbed 1.01% to close at 5,648.40 points, while the tech-heavy Nasdaq Composite gained 1.13%, ending the day at 17,713.62 points.
In Europe, equity indices also saw gains over the week, driven by improved inflation expectations, as reflected in Eurozone inflation data, which bolstered investor sentiment in European markets.
