Select Page

The Dow Jones Industrial Average on Thursday rallied more than 400 points and the S&P 500 touched a fresh 13-month high, as investors bet the Federal Reserve was close to done raising rates after the central bank this week skipped a hike.

The 30-stock Dow added 428.73 points, or 1.26%, to close at 34,408.06. The S&P 500 climbed 1.22% to finish the session at 4,425.84, while the Nasdaq Composite gained 1.15% to close at 13,782.82. Bond yields were lower, while tech stocks continued to lead the market upswing — in line with the trend on Wall Street in 2023.

Thursday’s gains brought the S&P 500 and Nasdaq to their highest intraday levels since April 2022.

“The key question for the market [now] is, can value and cyclical stocks catch up to growth and tech?” said Dylan Kremer, co-chief investment officer at Certuity. “If it does, then that momentum has the ability to help grind the market higher.”

The S&P 500 is also riding its longest winning streak since November 2021 and is headed for its strongest weekly gain since March. From its October closing low, the broader market index is up 23%. It’s also risen 15% year to date. As for the Nasdaq, the tech-heavy benchmark is up more than 31% in 2023.

In tech, shares of Microsoftand Oracle were higher with gains of about 3.2% and 3.5%. Alibaba stock climbed close to 3.2%.

What Powell said

On Wednesday, Fed Chair Jerome Powell said during a post-meeting press conference that the Federal Open Market Committee would use the six weeks until its next meeting to “take into account the cumulative tightening of monetary policy.” He added that a decision on July’s policy move has not yet been made. The upswing on Thursday shows investors remain willing to place bets on the overhang of uncertainty heading into the July FOMC meeting.

Still, Powell insisted that the central bank will likely raise rates further this year, and said the Fed will remain data dependent on a month-by-month basis. Stocks whipsawed throughout Powell’s comments on Wednesday.

Additional economic data releases Thursday morning gave investors and policymakers better insight on the strength of the labor market and consumer spending. Weekly jobless claims numbers were slightly above estimates at 262,000 compared to a Dow Jones estimate of 245,000, while retail sales ticked up 0.3%.

Source: CNBC