NEW YORK: Large tech shares soared on Thursday (Feb 2) as better-than-expected results from Facebook parent Meta Platforms fuelled hopes about forthcoming earnings from Apple and other giants.
The Dow Jones Industrial Average fell 39.02 points, or 0.11%, to 34,053.94, the S&P 500 gained 60.55 points, or 1.47%, to 4,179.76 and the Nasdaq Composite added 384.50 points, or 3.25%, to 12,200.82.
Shares of Google parent Alphabet and Amazon piled on more than 7%, while Apple gained 3.7% in Thursday’s session ahead of earnings releases from all three companies.
Investors are hopeful as Meta surged nearly 23% after reporting a smaller drop in annual sales than anticipated, as the company announced that the number of daily users on Facebook hit two billion for the first time.
Analysts also praised Meta’s cost-cutting measures, which is “reawakening the company as it returns to its profitable roots”, said Briefing.com.
Investors were still digesting the Federal Reserve's policy decision on Wednesday and comments from Powell, who acknowledged progress in the fight against inflation and appeared reluctant to push back against the rally in stocks and bonds.
“I think the reaction to Fed comments really encouraged investors to go risk on,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey. “The bottom line for investors I think is that the Fed’s comments were unexpected.”
Investor sentiment was also boosted by hopes that the Fed will soon end its interest rate hiking cycle after announcing a smaller increase Wednesday amid progress on inflation.
Fed chairman Jerome Powell’s “dovish tone” on Wednesday sets the US central bank up for “one or two more quarter-point rate rises left in this rate hiking cycle,” said Oanda’s Edward Moya.
Wednesday's Fed decision set the stage for Thursday rate increases announced by the European Central Bank and Bank of England.
Investors are looking ahead to Friday's government jobs report, expected to show the US economy added 190,000 jobs last month and that unemployment edged up to 3.6% from 3.5%. – AFP, Reuters