All three major U.S. stock indexes notched their fourth consecutive weekly gains. US stocks ended sharply higher on Friday and the S&P 500 registered an all-time closing high as strong earnings and a blowout January employment report boosted confidence in the economy, even while lowering the likelihood that the Federal Reserve will cut interest rates any time soon.
Solid quarterly results from Meta Platforms and Amazon.com helped boost the S&P 500 index and the Nasdaq Composite Index over 1%, while the blue-chip Dow Jones Industrial Average’s gain was more muted.
Earnings were strong for most companies this week, and we believe the Fed meeting was bullish because it properly set expectations for May or June rate cuts, said Jay Hatfield, portfolio manager at InfraCap in New York.
The U.S. added 353,000 jobs in January, blasting past analysts’ estimates, while wage growth unexpectedly heated up, the Labor Department reported.
The added signs of economic vigor made it more likely that the U.S. central bank will delay cutting its key policy rate until much later than many had hoped. Fed Chair Jerome Powell on Wednesday pushed back against the notion of a March rate cut.
Fourth-quarter earnings season is barreling along, with 230 of the companies in the S&P 500 having reported. Of those, 80% have come in above Wall Street expectations.
On aggregate, analysts now see year-on-year S&P 500 earnings growth of 7.8% for the October-to-December period, a significant improvement over the 4.7% estimate as of Jan. 1.
Meta Platforms surged 20.3% to a record high after issuing its first dividend days ahead of the 20th anniversary of its Facebook unit.
Amazon.com jumped 7.9% following a fourth-quarter revenue beat as new generative artificial intelligence features in cloud and e-commerce businesses spurred robust growth during the year-end holidays.
Regional bank shares stabilized after two straight days of sharp sell-offs sparked by disappointing earnings from New York Community Bancorp. The bank’s stock rebounded on Friday, rising 5.0%.
The S&P 500 climbed 1.07% to end the session at 4,958.61 points. The Nasdaq gained 1.74% to 15,628.95 points, while the Dow Jones Industrial Average rose 0.35% to 38,654.42 points.
Of the 11 S&P 500 sector indexes, six rose, led by communication services, up 4.69%, followed by a 2.49% gain in consumer discretionary.
Cigna rose 5.4% after the health insurance provider hiked its annual profit forecast.
Microchip Technology dropped 1.6% in the wake of the chipmaker’s disappointing sales forecast.
Footwear maker Skechers U.S.A also provided a downbeat forecast, sending its shares down 10.3%.
Oil supermajor Chevron Corp gained 2.9% after beating analyst estimates.
Declining stocks outnumbered rising ones within the S&P 500 by a 1.2-to-one ratio.
The S&P 500 posted 68 new highs and four new lows; the Nasdaq recorded 75 new highs and 144 new lows.
Volume on U.S. exchanges was relatively light, with 11.2 billion shares traded, compared to an average of 11.6 billion shares over the previous 20 sessions.
