The S&P 500 indices, as and Nasdaq Composite, as well as Nasdaq Composite, rose on Friday, closing their strongest month of 2017, with consistent growth in earnings data, and accelerating the tech-led market rally that came out of the downturn in January.
The market index for the broad market rose 0.5 percent, to 4,500.53 and the Nasdaq’s tech-heavy Composite increased 1.6 percent, to 14,098.01. The Dow Jones Industrial Average fell 21.42 points (or 0.06 percent in value, to 35,089.74.
The week was concluded by a rise in the S&P 500 increasing 1.5 percent, and the Nasdaq increased by 2.4 percent. The Dow ended the week with a gain of 1.1 percent. The Dow is up for the second time for 2022, with higher averages. were in the grip of recession the previous month. Fears of rising interest rates drove tech stocks down.
Amazon has led the S&P in the S&P and Nasdaq gains, gaining 13.5 percent following its solid quarterly results and beating cloud revenues. This was the largest single-day gain since the year 2015. Snap increased 58.8 percent within a day after it announced earnings. Pinterest was up 11.2 percent.
“We are living in a tense period, yet technology has been criticized for a long time and today the market is flooded with traders who believe it’s the right moment to make a positive change and positive, particularly with regard to some of the companies that have proved repeatedly that they’ve been adept at managing various types of situations, and have promising perspectives for the future” including Amazon, Apple, and Alphabet as per Edward Moya, senior market analyst at Oanda.
On Friday, traders also weighed in on a much stronger-than-expected jobs report and its potential impact on US monetary policy going forward.
10-year Treasury yield was higher than 1.9 percent and was at the highest since December 2019, following the employment report for January that showed a 467,000 increase in the number of employees. The economic analyst’s interview with Dow Jones had expected a slightly higher number of 150,000 while some experts forecast a rise of a significant amount. Experts in economics had warned prior to publication that the data could be noisy because of an omicron wave that struck as the survey was taking place.
“For markets, this report on jobs is about the Fed and today’s surprise positive in job creation, as well as wage growth, will keep the Fed on track to begin increasing rates in March, and then raise the rate 4 or more times this calendar year,” explained Barry Gilbert Chief Asset Officer. Allocation Strategist at LPL Financial.
The benchmark yield has increased from 1.51 percent to 1.61 at the close of 2021. The Fed has made a change to fight inflation more vigorously, signaling it is going to slow the buying of bonds and increase rates several times throughout this year. The higher rates have impacted the stocks, especially those in the technology sector with the most expensive valuations. The S&P 500 has dropped more than five percent over the past year.
Wall Street was coming off an awful session during which the fall of Meta shares caused the mega-cap tech stocks to plummet. Meta shares suffered the worst day of their lives on Thursday, plummeting 26.4 percent in the wake of disappointing earnings for the quarter.
The Nasdaq Composite, heavily influenced by tech and technology stocks, dropped 3.7 percent Thursday. This was the lowest performance for a single day since September. It was the lowest performance since September 2020. S&P 500 saw its lowest day of the year dropping 2.4 percent, and the Dow dropped 518.17. Points.
Based on Adam Sarhan, CEO of 50 Park Investments, the dramatic decline in Meta Platforms, as well as the fall of Netflix following its earnings announcement in the past week, could suggest a slowing down beneath the surface, and a bearish outlook in the markets.
“Some of the tech mega-cap stocks are trading as penny stocks. This is a major shift beneath the surface from a bull market that is outright to one that may be edging towards or bringing into a bear market on Wall Street,” he stated.
“For this first time, in the long period of time since Covid, we’re witnessing an enormous, almost 180-degree change within the stock market. While we’re still witnessing improvement and positive figures the market isn’t getting wild and blind anymore. . Instead, they’re falling.”