(Bloomberg) — The stock market was rattled once again by mounting concern the Federal Reserve will have to be more aggressive to thwart the fastest inflation since the 1980s.
At the end of a week that saw wild gyrations, the S&P 500 fluctuated as traders continued to recalibrate their portfolios to reflect a scenario of faster interest-rate hikes. A strong earnings report from Apple Inc. pushed technology shares higher.
Markets have whipsawed since Fed Chair Jerome Powell signaled aggressive tightening, adding to investor concerns about geopolitical tensions and an uneven earnings season. Fed Bank of Minneapolis President Neel Kashkari said Friday “we just don’t know” if three 2022 hikes are enough. BlackRock Inc.’s chief fixed-income strategist Scott Thiel warned that the Fed risks a hawkish policy mistake as it strives to extinguish inflation largely caused by the chaos in global supply chains.
“TGIF. What a wild week,” wrote Callie Cox, U.S investment analyst at eToro. “Buyers and sellers are stuck in a tug-of-war, and neither seem to be gaining much ground. The Fed tried to give investors a dose of certainty this week, but it seems like Powell’s comments and non-committal attitude have only led to more questions about rate hikes. The everyday investor seems to be just as confused as Wall Street.”
Equities briefly rose after a report showed the employment cost index — which Fed Chair Jerome Powell cited as key for the pivot to a more aggressive stance on inflation — came in below expectations. While the the central bank’s preferred price gauge advanced at the fastest annual pace in nearly 40 years, it was in line with forecasts.
Corporate highlights:
- Visa Inc. reported earnings that beat the average analyst estimate.
- Caterpillar Inc.’s earnings beat estimates as surging demand and higher prices for diggers, bulldozers and trucks muted the impact of rising raw-materials costs.
- Chevron Corp. posted disappointing profits after slumping values for some long-held fields hurt the oil giant’s ability to take full advantage of surging energy prices.
- Robinhood Markets Inc.’s revenue that fell short of Wall Street estimates as equities trading declined and gave a disappointing outlook.
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
- The S&P 500 rose 0.2% as of 10:50 a.m. New York time
- The Nasdaq 100 rose 0.7%
- The Dow Jones Industrial Average fell 0.3%
- The Stoxx Europe 600 fell 1.4%
- The MSCI World index was little changed
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro rose 0.1% to $1.1160
- The British pound rose 0.2% to $1.3416
- The Japanese yen rose 0.1% to 115.20 per dollar
Bonds
- The yield on 10-year Treasuries declined one basis point to 1.79%
- Germany’s 10-year yield advanced two basis points to -0.04%
- Britain’s 10-year yield advanced two basis points to 1.25%
Commodities
- West Texas Intermediate crude rose 1.5% to $87.94 a barrel
- Gold futures fell 0.5% to $1,786.30 an ounce
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