Wall Street closed with a steep climbcapping another week of gains led by Apple and other companies that made even bigger-than-expected profits over the summer.
The S&P 500 it rose 2.5% on Friday and marked its first consecutive weekly rise since August. The Dow-Jones closed 2.6% higher and the nasdaq it rose 2.9 percent.
Stocks have recently rebounded, in part on hopes that the big interest rate hikes that have been rattling the market will be eased later this year. More recently, many of the big US companies have posted stronger-than-expected results, although the stock market remains decidedly mixed. Apple, Intel and Gilead Sciences all rose on good reports, which helped offset a disappointing outlook from Amazon.
One of the reasons stocks have revived recently is the hope of a “pivot” of the Federal Reserve, in which the central bank cut big interest rate hikes that have shaken the market. This move could boost the market, but many analysts say these hopes may be exaggerated.
“This rally has become a bit irrational Y fragile at this level,” said Liz Young, chief investment strategist at SoFi.
The central bank has been very clear about its plan to control the inflationhe said, meaning big gains on hopes of a pullback seem premature.
More recently, many of the big American companies have posted profits stronger than expectedalthough the stock market remains decidedly mixed.
Manzana It rose 7.7% and was the biggest lifter of the S&P 500 in its first trading after posting higher-than-expected revenue and profit for the latest quarter. Intel soared 9.5% after posting a much larger profit than analysts expected, though he said he saw “economic conditions worsening.”
Gilead Sciences soared 12.1% and T-Mobile US gained 6.9% after they also beat Wall Street’s earnings expectations.
They helped offset the 8.2% drop in amazon, which offered a weaker-than-expected earnings forecast. It was the latest big tech company to take a hit this week after showing disappointing trends. It’s a sharp turn after the group dominated Wall Street for years with seemingly unstoppable growth.
at the beginning of the week, Meta Platforms lost nearly a quarter of its value after reporting a second straight quarter of declining revenue amid falling ad sales and stiff competition from TikTok. The parent company of microsoft Y Google it also reported a slowdown in key areas.
These issues have created a sharp divide on Wall Street this week, between big tech laggards and the rest of the market. The Nasdaq, packed with high-growth tech stocks, is on track to gain 1.7% this week. His result would be even worse were it not for Apple’s push on Friday. The Dow, meanwhile, is headed for a 5.5% jump on the week as it has less of an emphasis on technology.
Higher interest rates have hit Big Tech share prices harder than the rest of the market, with the pressure mounting on Friday as yields rose.
“Markets still don’t seem to want to believe that we can end up in a place where a recession benefits,” Young said.
The published data showed that the raises American workers got in wages and others offsets during the summer they were in line with economists’ expectations. That should keep the Federal Reserve on the path to follow. raising interest rates hoping to weaken the labor market enough to reduce the high inflation from the country. Other data showed that the Fed’s preferred measure of inflation remains very highand that American households continue to spend more against it.
The Fed is trying to deprive inflation of the purchases by households and businesses needed to keep it high. It does this by intentionally holding back the economy and the job market. The concern is that it could go too far and cause a sharp slowdown.
The Fed has already raised its overnight benchmark interest rate to a range of 3% to 3.25%, from practically zero in March. The general expectation is that next week it will make another increase to triple the usual size, before potentially making a smaller increase in december. Higher rates not only slow down the economy, but also hurt the prices of stocks and other investments.
The two-year Treasury yield, which tends to track expectations for Fed action, rose to 4.41% from 4.28% on Thursday.
The 10-year yield, which helps set rates on mortgages and many other loans, rose to 4.01% from 3.93%.
The trading of the shares of Twitter has ended, after Elon Musk has taken control of the company after a long legal battle.
In Europestock indices were mixed in relatively subdued trading.
Shares fell 0.9% in tokyo, despite the government passing a huge stimulus spending package to help the world’s third-largest economy deal with inflation. As expected, the Bank of Japan concluded a monetary policy meeting by keeping its ultra-loose monetary policy unchanged, despite anticipating higher inflation.
(With information from AP)