Wall Street rallied and the dollar weakened on Friday as investors approached the end of a solid quarter with data showing progress in the Federal Reserve’s efforts to curb inflation.
All three major US stock indices rose strongly and were on track to post weekly, monthly and quarterly gains.
“It’s a nice icing on the cake at the end of a great quarter and an even better start to 2023,” said Ryan Detrick, chief market strategist at Carson Group in Omaha. “This was one of the best starts to the year ever for Nasdaq and large-cap technology names, but let’s not forget that they were the hardest hit group in the vicious 2022 bear market.”
In the first half of 2023, the S&P 500 is up 16%, while the tech-heavy Nasdaq Composite weathered the artificial intelligence wave, rising nearly 32%, its best performance in four decades.
The Nasdaq 100 looks poised to post its biggest first-half gain ever, up nearly 39%.
The Dow is on track for a 3.6% year-to-date gain.
“The market continued to climb a wall of worry, fueled by optimism around AI, which represents a new growth engine in a leading growth sector,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
The Commerce Department’s Personal Consumption Expenditures (PCE) report showed cooler-than-expected inflation in May while consumer spending fell sharply, providing further evidence that the Fed’s barrage of rate hikes is having the desired effect.
“We think the Fed will raise rates in July because they’ve told us they want to, but they’re also reminding us that they depend on data,” Stovall added. I think after this upcoming meeting, the Fed will decide to end their rate hike program.”
Financial markets are still pricing in an 87% probability that the Federal Open Market Committee will pass another 25 basis point rate hike at the end of its July policy meeting, CME’s FedWatch tool showed.
The Dow Jones Industrial Average rose 331.14 points, or 0.97%, to 34,453.56; the S&P 500 gained 59.11 points, or 1.34%, at 4,455.55; and the Nasdaq Composite added 210.96 points or 1.55% at 13,802.29.
European equities closed higher, gaining 0.9% for the quarter, as dwindling hopes for China’s recovery from the COVID-19 crisis and lingering concerns about central bank restrictive policies fueled a stock rally that started earlier this year. year started, stopped.
The pan-European STOXX 600 index rose 1.16% and MSCI’s measure of equities around the world rose 1.14%.
Emerging market equities rose 0.35%. MSCI’s broadest index of Asia-Pacific stocks outside of Japan closed 0.27% higher, while Japan’s Nikkei lost 0.14%.
Against a basket of world currencies, the greenback gained for two consecutive days after the strong PCE report fueled optimism that the Fed is nearing the end of its tightening cycle.
The dollar index fell by 0.44%, the euro rose by 0.44% to $1.0912.
The Japanese yen strengthened 0.36% against the greenback to 144.25 per dollar, while the pound last traded at $1.2698, up 0.68% on the day.
US Treasury yields fell on weaker-than-expected consumer spending data.
Benchmark 10-year bonds rose in price last 11/32 to yield 3.8112%, from 3.854% late Thursday.
The 30-year bond last rose in price 33/32 to yield 3.8514%, from 3.912% late Thursday.
Crude oil prices ended a three-day losing streak in the wake of the solid PCE report.
US crude was up 1.12% to $70.64 a barrel, while Brent was up 0.75% on the day at $74.90 a barrel.
Gold prices rose in opposition to the weakening dollar, but remained on track for their first quarterly decline in three years.
Spot gold added 0.6% to $1,919.23 an ounce.
(This story has not been edited by News18 staff and was published from a syndicated news agency feed – Reuters)