Toronto –
Stocks shrugged off the midday crash and closed higher on Wall Street, ending a four-day losing streak.
The S&P 500 rose 0.5% on Thursday. The Nasdaq Composite and Dow Jones Industrial Average also rose. Tech stocks helped lead the way after Nvidia reported better-than-expected results in its latest quarter.
This is a turnaround for tech and high-growth stocks, which have struggled recently due to concerns about rising interest rates. They are considered some of the most vulnerable countries as the Federal Reserve sets higher interest rates in hopes of keeping inflation under control. Government bond yields fell.
This is a breaking news update. Here’s AP’s previous story:
The stock is trending higher in Thursday’s trading and is back on track to break its four-day losing streak on Wall Street.
The S&P 500 gained 0.6% after a series of small gains and losses throughout the day. As of 3:05 pm ET, the Dow Jones Industrial Average rose 105 points (0.3%) to 33,150 and the Nasdaq Composite was 0.8% higher than him.
Tech stocks helped lead the way after Nvidia reported better-than-expected results in its latest quarter. The company’s stock surged 14.1% after he also announced future earnings forecasts that beat some analysts’ expectations. It cites the resilience of video games and the demand for artificial intelligence products.
This is a turnaround for tech and high-growth stocks, which have struggled recently due to concerns about rising interest rates. They are considered some of the most vulnerable countries as the Federal Reserve sets higher interest rates in hopes of keeping inflation under control.
High interest rates hit investments that are seen as the riskiest, most expensive, or furthest away from significant future growth. It also increases the risk of a recession as the economy slows.
After a surge in January, stock markets across the board have hit a wall this month on concerns that inflation has not cooled as quickly or smoothly as hoped. A longer list of reports showed the economy was in a stronger than expected state.
While this has raised hopes of avoiding a near-term recession, it has also forced Wall Street to recalibrate its expectations of how high the Fed will set rates and for how long. .
The latest economic data released on Thursday also suggests an economy strong enough to encourage the Fed to continue its interest rate campaign. The concern is that a strong economy could lead to upward pressure on inflation.
Fewer than expected workers filed for unemployment benefits last week. This suggests that the job market remains resilient despite the fastest unemployment rate in decades.
Another report says that US economic growth in the last three months of 2022 is likely to be slightly weaker than previous estimates. Still, it grew at an annual rate of 2.7%.
Sam Stovall, chief investment strategist at CFRA Research, said strong economic data back in this month’s jobs report forced him to add another rate hike to his forecast before the Fed paused. . He also pushed how long he thinks it will take the S&P 500 to hit his target 4,575 level. Instead of thinking it will happen by the end of this year, he thinks it could be 12 months from now.
“The bond market has been pretty pessimistic from the start,” Mr. Stovall said.
“We think the Great Recession will probably never be repeated. It could happen 14 months after the start of the recession.”Equity bear market”.
Wall Street’s growing hopes for the Fed are most evident in the bond market, where US Treasury yields surged this month. They were easing a bit on Thursday, taking the pressure off the stock.
Yields on 10-year government bonds, which help set rates on mortgages and other important loans, fell to 3.88% from 3.93% at the end of Wednesday.
Earlier this week, it crossed 3.95%, racing towards its highest level since November.
Moderna loses out on Wall Street, trading 6.9% after reporting a 70% drop in fourth-quarter earnings as COVID-19 vaccine sales dwindle and drug companies catch up on royalty payments. fell.
Domino’s Pizza fell 11.5% despite reporting stronger-than-expected gains. Earnings were lower than expected, lowering the high and low ends of the projected range of global sales growth over the next two to three years.
Lordstown Motors fell 12.2% to $1.08 after it announced it would temporarily halt production and delivery of Endurance electric pickups due to performance and quality issues with certain components.
