Stock market today: Big Tech carries Wall Street to another record and winning week

Stock market today: Big Tech carries Wall Street to another record and winning week

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NEW YORK (AP) — Big Tech stocks once again led Wall Street to a record high on Friday, even as most stocks fell amid concerns about the downside of a booming economy.

Big gains from Meta Platforms and Amazon helped lift the S&P 500 index 1.1% to its latest all-time high. He is on a torrid run in which he has been promoted in 13 of the last 14 weeks. Big Tech stocks, which are two of the most influential on Wall Street, also sent the Nasdaq composite up 1.7%.

But the Dow Jones Industrial Average, which has less emphasis on technology, rose a more modest 0.3%, or 134 points. And the Russell 2000 index of smaller stocks fell 0.6%.

Stocks felt pressure from much higher yields in the bond market after a report showed American employers hired many more workers last month than economists expected.

While the strength is a boon for workers and keeps the risk of a recession at bay, the concern is that it could preserve some upward pressure on inflation. That, in turn, could mean a longer wait for the Federal Reserve to start cutting interest rates.

Hopes for such cuts, which could ease pressure on the economy and raise investment prices, have been one of the main reasons the US stock market has reached record highs. Federal Reserve Chairman Jerome Powell said earlier this week that the cuts are unlikely to begin as soon as merchants expected.

“The Federal Reserve poured some cold water on the idea of ​​a March rate cut less than 48 hours ago, and today’s surprisingly strong jobs report won’t kill things,” said Chris Larkin, managing director of trade. and E-Trade investment. from Morgan Stanley. “It’s definitely not the kind of data the Fed had in mind when it said it wanted to see more evidence that inflation pressures were under control.”

The 10-year Treasury yield jumped immediately after the jobs report was released, rising to 4.02% from 3.88% late Thursday.

Traders had already placed bets on the timing of the Fed’s first rate cut in May from March, following Powell’s warning earlier this week. After the jobs report, traders moved some bets even further off the calendar into June, according to data from CME Group.

In addition to the overall hiring figure, the jobs report included several signs that were much stronger than expected. Workers’ average hourly earnings rose more in January than expected. The unemployment rate unexpectedly did not worsen. And the government said hiring was actually much stronger in December than it had previously reported.

The question for the stock market will be whether the advantages of such strength outweigh the disadvantages. That is, will a stronger economy generate enough additional corporate profits to offset delayed or dashed hopes for rapid and significant interest rate cuts?

“Big gains in payrolls and wages are not something to fear,” said Brian Jacobsen, chief economist at Annex Wealth Management. “The Federal Reserve has stopped insisting that the labor market needs to weaken before inflation falls sustainably.”

He pointed to a report earlier this week that showed an increase in the productivity of American workers, which could help offset the effect of higher wages.

The jobs report hit Wall Street amid a flurry of earnings reports that could have helped move the market on their own.

MetaplatformsThe owner of Facebook and Instagram, soared 20.3% after it reported stronger-than-expected earnings for the latest quarter and said it would begin paying a dividend to its investors.

Amazon surged 7.9% after reporting stronger-than-expected earnings and revenue for the latest quarter.

Both are members of a small group of Big Tech stocks known as the “Magnificent Seven,” responsible for most of Wall Street’s run to a record. Their huge profits have created very high expectations for their growth, which they must meet to justify the large rises in their stock prices.

Appleanother member of the Magnificent Seven, fell 0.5% despite reporting better-than-expected earnings.

Charter Communications plunged 16.5%, the biggest loss in the S&P 500 after it reported weaker-than-expected fourth-quarter earnings.

Utility stocks were also particularly weak, with those in the S&P 500 falling 1.8%. In addition to tending to lag the market when there is a lot of enthusiasm for the economy, utility stocks are also hurt by high interest rates. Bonds that pay high yields can drive away investors who might otherwise have been interested in the relatively high dividends of utility stocks.

In total, the S&P 500 rose 52.42 points to 4,958.61. The Dow Jones gained 134.58 to 38,654.42 and the Nasdaq jumped 267.31 to 15,628.95.

In overseas markets, shares fell 1.5% in Shanghai to cap their worst week in five years. Concerns about a faltering economic recovery and problems for the real estate industry have made the market one of the worst in the world recently.

The International Monetary Fund predicts chinese economy It would grow at a rate of 4.6% this year and 4% in 2025, compared to 5.2% last year.

Stocks were mixed elsewhere in Asia and Europe.


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