Tech Stocks Steadily Leading The Market
Wall Street’s bullish start to the year got even bigger on Thursday as gains in tech stocks and the parent company of Facebook lifted the market higher.
The S&P 500 rose 1.53% after hitting its best level since August. The Nasdaq Composite rose 3.34%, while the Dow Jones Industrial Average lagged as it weighed less on technology. It fell by 39 points, or 0.14%.
Meta increased 23.35% after it said it would spend less this year than earlier expectations and had higher revenue than expected in the latest quarter. While its latest earnings fell short of expectations, the Facebook parent also announced a $40 billion share buyback program.
Stocks rallied at the start of the year on hopes that the Federal Reserve might soon hold off on raising interest rates. Such a large increase certainly helps to cut inflation, but it also hurts the economy and the value of investments.
Markets have taken this to mean that a pause may be imminent, and investors have even placed bets on a rate cut this year. A rate cut acts as a stimulus to markets, lowering prices and boosting the economy.
European market
The ECB cut its key rate by 0.50% and announced a second rate hike in May. The BOE raised its base rate by half a percentage point and said it saw signs that inflation had turned around. However, the BoE stressed that it was too early to declare a victory over inflation.
European shares rose, with Germany’s DAX returning 2.25%. In London, the FTSE 100 rose by 0.81%.
Movements in Asia were steadier, Hong Kong’s Hang Seng was down 0.52% and Japan’s Nikkei 225 down 0.25%.
On Wall Street, big jumps in several Tech stocks helped up the market ahead of their earnings reports that came in after-hours trading. Amazon and Google’s parent company, Alphabet, rose 7.6%, while Apple rose 3.77%.
Each pulled back in later trading, however, after posting results that investors unfavorably viewed. Because these stocks are among the largest by value, their movements impact the S&P 500 and other indexes more.
Next up for the market is Friday morning’s US jobs report, which economists expect will show a slight slowdown in employment. The job market has been largely resilient, even with the Fed’s rapid rate hikes over the past year.
Major technology companies have recently announced high-profile layoffs, but Thursday’s report said the job cuts aren’t widespread.
Treasury yields were steady after falling in previous days, suggesting expectations are easing for the Fed. The yield on the ten-year Treasury fell to 3.41% from 3.421% on Wednesday. The two-year yield, which is more in line with Fed expectations, was at 4.15%.
