U.S. equity markets have notched their highest levels of the year as the Dow Jones Industrial Average flirts with the psychologically-significant 18000 level.
The S&P 500’s financial sector was by far the biggest gainer on the session Thursday as quarterly results from several of the nation’s biggest banks haven’t been as bad as the Street feared. Wells Fargo (NYSE:WFC) and Bank of America (NYSE:BAC) reported their first-quarter earnings ahead of the bell. Bank of America posted a bottom line beat as revenue fell short of expectations, while Wells Fargo revealed a beat on both lines.
For context, the sector is still beaten down on a year-to-date basis, down more than 3.4% due to increased regulation, low rates and the banks’ exposure to energy-sector debt.
Despite the recent upward momentum in the market, DR Barton, chief technical strategist at Money Map Press, said he expects the rally to pause here.
“We have some pretty firm technical resistance and we’ve gone up so far so fast since our lows in February that the market, I think, will just not have enough gas to make it through the  level this pass,” he said on the FOX Business Network's Varney & Co.
Indeed, U.S. stocks have seen a sharp rebound from the February trough, jumping more than 12% as the broader averages have bounced back into positive territory for the year.
Part of that momentum, Barton said, is positive reaction to action from the Federal Reserve, which has opted to keep rates steady for the first four months of the year after raising rates in December for the first time in nearly a decade.
“I believe the Fed gave us the happy juice to do this, and if you look at what we’ve been doing for the past almost four weeks, we’ve been between a tight 400-point range where the markets have been kind of happy, but at the top of the page, to be fair,” he explained.
Minutes from the Fed’s March meeting showed the central bank was still concerned about headwinds from a slowing global economy, as the U.S. labor market and inflation continue to move closer to the central bank’s targets.