S&P 500 jumps on tech rally as Powell offers scant new clues
By Yasin Ebrahim
Investing.com --The S&P 500 jumped in wild trading after Federal Reserve chairman Jerome Powell offered little new clues on policy in a speech Tuesday, reiterating the need for more rate hikes in what will likely be a long-drawn-out battle against inflation.
The S&P 500 rose 0.9%. the Dow Jones Industrial Average gained 0.44% or 149 points, and the Nasdaq jumped 1.4%.
Powell's remarks were largely a recant of his prior remarks, but many were eager to see if the recent January jobs report would force him to tilt more hawkish. Powell admitted that last week's jobs report was stronger than anyone had expected, and was further evidence that inflation will take a long time to ease to the Fed's 2% target.
Bringing down inflation will take a “significant period of time,” Powell said Tuesday to the Economic Club of Washington, reiterating the need for ongoing rate hikes.
[W]e think that we're going to need to do further rate increases, as we said [at the February meeting], and we think that we'll need to hold policy and restrictive level for a period of time,” he added.
“On the back of Powell's appearance we are adding a 25bp to the May FOMC meeting, bringing our expectation for the peak rate to 5.00% to 5.25%,” Morgan Stanley said in a note.
After choppy trading, bullish bets on stocks prevailed, driven by a surge in big tech.
Microsoft Corporation (NASDAQ: MSFT ) and Alphabet Inc (NASDAQ: GOOGL ) led to the upside just as the AI arms race between the two tech heavyweights and others in big tech gets underway.
A day after Google released its AI-powered chatbot Bard, Microsoft held an event, detailing plans to integrate ChatGPT into its search engine Bing as well as other products.
“With new and attractive features for its users on the Bing search engine, MSFT’s AI-driven strategy is set to challenge the web search market by grabbing market share as users see increased benefits and a new user experience,” Wedbush said in a note.
Energy was also among the leading sectors on the day as oil prices were supported by a weaker dollar and ongoing China-led demand optimism.
Valero Energy Corporation (NYSE: VLO ), Marathon Petroleum (NYSE: MPC ), and Occidental Petroleum Corporation (NYSE: OXY ) were the biggest gainers.
In deal news, CVS Health (NYSE: CVS ) is reportedly closing in on a deal to buy the primary-care provider Oak Street Health (NYSE: OSH ) for $10.5 billion.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.
Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb
Drop an image here or