US stocks gained buoyed by a rally in technology shares as investors digested the latest Fedspeak for clues on the policy path. Treasuries fell, while the dollar pared gains.
(Bloomberg) — US stocks gained buoyed by a rally in technology shares as investors digested the latest Fedspeak for clues on the policy path. Treasuries fell, while the dollar pared gains.Â
The S&P 500 Index climbed to session highs, while the tech-heavy Nasdaq 100 jumped more than 1%. Google parent Alphabet Inc. rose after revealing a plan to cut 12,000 jobs. Netflix Inc. jumped after reporting stronger-than-expected subscriber numbers.
Still, Treasury yields stayed higher across the board, following similar moves in European sovereigns and comments by Federal Reserve officials. Philadelphia Fed President Patrick Harker repeated his view to raise interest rates in more incremental steps of 25 basis points and that he favors raising rates slightly above 5%.
Investors have kept a close watch on Fed speakers this week ahead a blackout period before the next policy decision on Feb. 1. Equity markets have faced headwinds this week from Fed and European Central Bank officials reiterating their hawkish stance, despite signs of inflation cooling and weak data pointing to the increased possibility of a US recession.Â
Housing data Friday showed existing US home sales fell in December to the slowest pace in over a decade, capping one of the housing market’s worst years on record.
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Earnings have also been in focus. With 10% of S&P 500 companies having reported the latest quarterly earnings, initial trends suggest a rapid deterioration in profitability, helping to erase about $700 billion of equity value in the past two days alone.
On Thursday, Fed Vice Chair Lael Brainard, considered a dove, said rates would need to stay elevated for a period to further cool inflation. Her comments came a day after St. Louis Fed President James Bullard penciled in a forecast for a target-rates range of 5.25% to 5.5% by the end of this year. The current range is 4.25% to 4.5%.Â
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The nascent earnings-reporting season has brought concern that higher interest rates are already impacting the economy and corporate performance. Of the 55 S&P 500 companies that have reported results so far, only two-thirds have beaten analysts’ estimates, compared with the 80% positive surprise seen over the past several quarters.
Oil contracts rose for a second day, with West Texas Intermediate crude heading for a weekly advance. Traders were emboldened by Chinese demand that’s been picking up after the nation abandoned harsh virus restrictions.
Copper held on to its fifth weekly increase in London, its best run since May 2021, with global supply risks persisting and inventories near historic lows.
Here are some of the main market moves:
Stocks
- The S&P 500 rose 0.6% as of 10:35 a.m. New York time
- The Nasdaq 100 rose 1.1%
- The Dow Jones Industrial Average rose 0.1%
- The Stoxx Europe 600 rose 0.3%
- The MSCI World index rose 0.6%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0840
- The British pound was little changed at $1.2388
- The Japanese yen fell 1% to 129.75 per dollar
Cryptocurrencies
- Bitcoin rose 1% to $21,151.02
- Ether rose 1.3% to $1,564.88
Bonds
- The yield on 10-year Treasuries advanced seven basis points to 3.46%
- Germany’s 10-year yield advanced 10 basis points to 2.16%
- Britain’s 10-year yield advanced six basis points to 3.34%
Commodities
- West Texas Intermediate crude was little changed
- Gold futures rose 0.3% to $1,930.20 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson, Brett Miller, Rob Verdonck and Srinivasan Sivabalan.
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