US. stocks closed slightly higher on Wednesday, as stocks rallied as the economy restarted. The epidemic situation in the United States has slowed down, and nearly half of the people have been vaccinated, making investors optimistic about the prospects for economic recovery. The market continues to focus on the currency outlook and its impact on Fed policy.

The Dow was up 10.59 points, or 0.03%, at 34323.05; the Nasdaq was up 80.82, or 0.59%, at 13738.00; and the S & P 500 was up 7.86, or 0.19%, at 4195.99.

Wednesday marks the 125th anniversary of the birth of the Dow Jones Industrial average. The index had 12 stocks when it first made its debut more than a century ago. The Dow's best year came in 1915, when the benchmark index rose 81.7%. 1931 was the worst year for the index, with an annual decline of 52.7%.

Economic recovery concept stocks generally rose. Carnival, a cruise ship operator, closed about 2.5% higher. Royal Caribbean rose 3.5 per cent as it was allowed to start trials on cruise ships with volunteer passengers.

Bitcoin continued to rebound, helping to boost risk sentiment in financial markets. Bitcoin rebounded to more than $40, 000 on Wednesday, according to Coin Metrics. As Bitcoin rebounded, Tesla, the largest holder of Bitcoin, closed 2.4% higher at $17.65 billion on Wednesday.

Lisa Shalett, chief investment officer of Morgan Stanley wealth management, said investors should not be complacent that most US stock indices remain near record highs. The core point is as follows.

The US consumer price index (CPI) and producer price index (PPI) in April were both much higher than expected, with several "core" CPI inputs worryingly high. While some aspects of recent inflation may be temporary, a series of long-term changes that are taking place suggest that price increases are likely to continue. In addition to pushing up corporate borrowing costs, interest rates and the concomitant rise in inflation are likely to depress the value of stocks.

Citigroup's US economic surprise index, (Citi US Economic Surprise Index), fell to 14.7 from 92.2 after falling to negative shortly after disappointing housing starts last week. The index measures the surprise of the data relative to market expectations. The weakening upward momentum of economic data may indicate a slowdown in economic growth.

Supply chain imbalances, rising input costs and rising wages could put pressure on corporate earnings in some industries and could exacerbate less favourable annual comparisons, as we have been more than a year since the start of the 2020 pandemic.

These factors, coupled with possible high taxes and a reduction in bond purchases by central banks, increase the likelihood of a correction and continued volatility in the stock market. However, the emergence of volatility may create opportunities for investors to shift their portfolios to high-quality stocks, especially those with high and manageable returns on equity and free cash flow. and stocks that have good growth prospects at reasonable prices.

Morgan Stanley believes investors should also consider avoiding a significant increase in their holdings of major passive market capitalization weighted indices.

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