New York: The Dow and S&P 500 advanced on Thursday as bank stocks rose after major lenders passed the Federal Reserve’s annual stress test, while strong economic data raised hopes of further interest rate hikes from the central bank.
Stronger-than-expected economic data pushed Treasury yields higher and attracted investors to economically sensitive sectors recession The fear subsided. But concerns about the Fed keeping interest rates high for an extended period of time drove buyers away from some rate-sensitive growth sectors.
The S&P 500 bank index closed up 2.6% after a health check showed the biggest US banks have enough capital to weather a severe economic downturn. The relief rally also helped propel the KBW regional banking index a further 1.8%.
Data showed an unexpected weekly drop in the number of Americans filing new claims for unemployment benefits, and US GDP grew at a 2.0% annual rate in the first quarter, faster than the 1.3% pace previously reported .
“Notably surprising economic data lifted yields today and a move higher has put some pressure on technology and growth stock stocks, supporting the value and cyclical portions of the market,” said Mona Mahajan, senior investment strategist at St. Louis-based Edwards. ” Jones.
Dow Jones The industrial average rose 269.76 points, or 0.8%, to 34,122.42, the S&P 500 rose 19.58 points, or 0.45%, to 4,396.44 and the Nasdaq Composite fell 0.42 points to 13,591.33.
The economically sensitive Russell 2000 index of small-cap stocks rose 1.2%, while the Cyclical Materials Index rose 1.3% and was the second-strongest performer among the 11 sectors of the S&P 500 behind financials, which gained 1.7% as banks rallied. increased by.
A day after sharp comments from Fed Chairman Jerome Powell, economic strength fueled speculation that the US central bank would maintain tight monetary policy for a long time.
According to CME Group’s FedWatch tool, traders were pricing in about an 86.8% chance that the Fed would hike interest rates by 25 basis points to a range of 5.25%-5.50% at its July meeting, up from a day earlier. 81.8% higher than the odds bet.
The Fed’s preferred inflation gauge, the personal consumption expenditure index (PCE) for May, will be released on Friday. Economists polled by Reuters expect key rates to hold steady at 4.7%.
The tech-heavy Nasdaq was still on track to gain more than 29% in the first half of the year, its biggest gain in 40 years. It managed to pare losses on Thursday and close barely lower, but remained under pressure throughout the day from losses in megacaps including Amazon, Meta Platforms, Nvidia and Microsoft.
The Philadelphia Semiconductor Index edged up 0.13% but underperformed during the session, capped by a 4% drop in Micron Technology shares even as the chipmaker beat estimates for third-quarter results.
Occidental Petroleum rose 1.8% after Berkshire Hathaway Inc added more shares of the oil company, bringing its holding to more than 25%.
Shares of sportswear maker Nike closed up 0.3% but then fell nearly 1% after the bell, even though its financial report showed it walloped for quarterly revenue with heavy demand for sneakers like the Air Jordan and LeBron 20. beat Street estimates.
Advancing issues outnumber declining issues on the NYSE by a 1.93-to-1 ratio; On the Nasdaq, a 1.48-to-1 ratio favored advancers.
The S&P 500 posted 44 new 52-week highs and 2 new lows; The Nasdaq Composite recorded 90 new highs and 90 new lows.
9.65 billion shares changed hands on US exchanges, compared to the 11.34 billion moving average of the last 20 sessions.
Stronger-than-expected economic data pushed Treasury yields higher and attracted investors to economically sensitive sectors recession The fear subsided. But concerns about the Fed keeping interest rates high for an extended period of time drove buyers away from some rate-sensitive growth sectors.
The S&P 500 bank index closed up 2.6% after a health check showed the biggest US banks have enough capital to weather a severe economic downturn. The relief rally also helped propel the KBW regional banking index a further 1.8%.
Data showed an unexpected weekly drop in the number of Americans filing new claims for unemployment benefits, and US GDP grew at a 2.0% annual rate in the first quarter, faster than the 1.3% pace previously reported .
“Notably surprising economic data lifted yields today and a move higher has put some pressure on technology and growth stock stocks, supporting the value and cyclical portions of the market,” said Mona Mahajan, senior investment strategist at St. Louis-based Edwards. ” Jones.
Dow Jones The industrial average rose 269.76 points, or 0.8%, to 34,122.42, the S&P 500 rose 19.58 points, or 0.45%, to 4,396.44 and the Nasdaq Composite fell 0.42 points to 13,591.33.
The economically sensitive Russell 2000 index of small-cap stocks rose 1.2%, while the Cyclical Materials Index rose 1.3% and was the second-strongest performer among the 11 sectors of the S&P 500 behind financials, which gained 1.7% as banks rallied. increased by.
A day after sharp comments from Fed Chairman Jerome Powell, economic strength fueled speculation that the US central bank would maintain tight monetary policy for a long time.
According to CME Group’s FedWatch tool, traders were pricing in about an 86.8% chance that the Fed would hike interest rates by 25 basis points to a range of 5.25%-5.50% at its July meeting, up from a day earlier. 81.8% higher than the odds bet.
The Fed’s preferred inflation gauge, the personal consumption expenditure index (PCE) for May, will be released on Friday. Economists polled by Reuters expect key rates to hold steady at 4.7%.
The tech-heavy Nasdaq was still on track to gain more than 29% in the first half of the year, its biggest gain in 40 years. It managed to pare losses on Thursday and close barely lower, but remained under pressure throughout the day from losses in megacaps including Amazon, Meta Platforms, Nvidia and Microsoft.
The Philadelphia Semiconductor Index edged up 0.13% but underperformed during the session, capped by a 4% drop in Micron Technology shares even as the chipmaker beat estimates for third-quarter results.
Occidental Petroleum rose 1.8% after Berkshire Hathaway Inc added more shares of the oil company, bringing its holding to more than 25%.
Shares of sportswear maker Nike closed up 0.3% but then fell nearly 1% after the bell, even though its financial report showed it walloped for quarterly revenue with heavy demand for sneakers like the Air Jordan and LeBron 20. beat Street estimates.
Advancing issues outnumber declining issues on the NYSE by a 1.93-to-1 ratio; On the Nasdaq, a 1.48-to-1 ratio favored advancers.
The S&P 500 posted 44 new 52-week highs and 2 new lows; The Nasdaq Composite recorded 90 new highs and 90 new lows.
9.65 billion shares changed hands on US exchanges, compared to the 11.34 billion moving average of the last 20 sessions.