US on Friday follows a week of strong tech earnings, even as investors assess two stronger-than-expected inflation reports for their potential impact on the Federal Reserve’s May policy decisions. Stocks rose.
The benchmark S&P 500 closed 0.8% higher following Thursday’s rally, which represented the biggest daily gain since 6 January. monthly profit.
Friday’s Nasdaq Composite index hit a three-day winning streak for the first time in a month. The tech-focused index rose 1.3% in the week and rose slightly in April.
who supported Wall Street Solid earnings performance From Meta, Microsoft and Alphabet this week. According to data provider FactSet, more than half of the S&P 500 companies have reported results so far, with nearly 80% reporting higher-than-expected earnings.
Meanwhile, First Republic stock 43% plunge It continued its free fall on Friday after the bank announced on Monday that its survival plans had failed to materialize as customers withdrew $100 billion during the March turmoil.
Investors also appreciate inflation The data released on Friday could put the Fed on track for a quarter-point rate hike next week.
The Labor Department’s Cost of Employment Index, which tracks wages and benefits paid by private and public sector employers, rose 1.2% in the first quarter. Both beat economists’ expectations.
“The Fed is in a tough spot,” said Bill Adams, chief economist at Comerica Bank. [and] Q1 GDP growth was just 1.1% on an annualized basis. But inflation is still too high, and the component of inflation that the Fed is most concerned about, labor-intensive services inflation, is particularly tenacious.”
Jack Ablin, chief investment officer at Cresset Capital, said:
US Treasurys rallied, with interest-sensitive 2-year Treasury yields dropping 0.06 percentage points to 4.03%. Yields move inversely to prices.
DRW Trading Strategist Lou Brien said: I think the market is in line with the idea that a recession is a real possibility. “
In Europe, the region-wide Stox 600 closed 0.6% higher, while Germany’s Dax rose 0.8%. France’s CAC 40 rose 0.1% as inflation in France accelerated more than economists expected in April, putting pressure on the European Central Bank at its meeting next week to keep pace with rate increases.
Analysts polled by Reuters expect the ECB to raise interest rates by 0.25 percentage points to 3.75%. [in inflation figures] Deutsche Bank macro strategist Henry Allen will continue to pressure the Fed to stick to faster rate hikes.”
Japanese stocks hit eight-month high after Bank of Japan Governor Kazuo Ueda’s announcement Published a review It supported the central bank’s ultra-accommodative monetary policy and opted not to immediately change course. The Nikkei 225 rose his 1.4%, its highest since late August. The yen fell 1.7% to 136.23 yen to the dollar.
Other Asian stocks also rose, with China’s CSI index up 1% and Hong Kong’s Hang Seng Index up 0.5%.
https://www.ft.com/content/d796d5ee-6088-47e2-a34c-52f83dae2328 S&P 500 extends rally after week of strong US tech earnings