NEW YORK: The S&P 500 snapped a four-day losing streak on Thursday (Feb 23), finishing higher along with other major indices following a rollercoaster session.
Lifted by solid earnings from chip company Nvidia, tech shares led the market in early trading. But stocks swooned in the middle of the day before recovering.
Equities have been under pressure this week amid worries that the Federal Reserve (Fed) will prolong a period of aggressive interest rate hikes.
But the yield on the 10-year US Treasury note edged lower after flirting with four percent.
The Dow Jones Industrial Average rose 108.82 points, or 0.33%, to 33,153.91, the S&P 500 gained 21.27 points, or 0.53%, to 4,012.32 and the Nasdaq Composite added 83.33 points, or 0.72%, to 11,590.40.
For part of the day, the S&P was trading below its 50-day moving average of 3,980 points, before rallying in the afternoon to finish above 4,000 points for the first time this week.
Influencing this intraday dip were large trades in short-dated derivatives that piled selling pressure on the market, according to Nomura strategist Charlie McElligott.
Seven of the 11 major S&P 500 sectors rose. Higher crude prices pushed energy up 1.3%, and the index halted a losing run at seven. This tied its biggest stretch of declines since an eight-session skid in March 2017.
“If you’re a bull, you can pull out plenty of things that are supportive, and if you’re bear there are plenty of things to point to that are supportive,” said Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers Solutions.
“There are so many cross currents that are moving in very different directions, I think it’s very difficult to fall back on one or two things. That’s creating a lot of hand-wringing uncertainty, and we’re range-trading as a result of it.”
Commerce Department data on Thursday showed the US economy grew in the last quarter of 2022 at a rate of 2.7%, annualised, lower than the 2.9% increase originally reported.
The report comes ahead of Friday’s reading on the personal consumption expenditures price index, which is a key data point for the Fed.
Traders are now fixating on a scenario in which the Fed undertakes quarter-point interest rate increases in March, May and possibly June, Oanda’s Edward Moya said in a note.
“With the Fed likely to deliver a few more rate increases, recession odds should be surging here,” he said. “Disinflation trends will get their groove back over the summer and that will allow the Fed to back off from this tightening campaign.”
Helping provide confidence to buyers, Nvidia Corp posted positive earnings and surged 14% after forecasting quarterly sales above estimates and reporting a surge in the use of its chips to power artificial intelligence services.
Other chipmakers also gained, with Broadcom Inc, Intel Corp and Qualcomm Inc rising between 0.6% and 1.8%. The Philadelphia SE Semiconductor index climbed 3.3%. – AFP, Reuters
