Gains in Apple Inc. pushed US stocks higher as traders digested a fresh batch of data that paved the path for the Federal Reserve to stay aggressive.
(Bloomberg) — Gains in Apple Inc.
pushed US stocks higher as traders digested a fresh batch of data that paved the path for the Federal Reserve to stay aggressive.
The S&P 500 and the tech-heavy Nasdaq 100 rose more than 1%.
Apple buoyed both indexes after it delivered just enough good news in its quarterly report on Thursday. Amazon.com Inc. plunged as much as 12%, falling below its $1 trillion market value.
Data on Friday showed that a core gauge of US inflation accelerated in September, while consumer spending stayed resilient, bolstering the Fed’s case for another jumbo rate hike next week.
US employment costs also rose at a firm pace, another data point that’ll keep the central bank firmly on its path. However, other data that released this week, including lower-than-expected US home sales, indicated that Fed tightening is already hitting the economy.
Economists are still expecting the Fed to raise rates by three-quarters of a percentage point for the fourth time in a row next week.
Treasuries remained weaker as hopes of a Fed pivot fizzled.
Lackluster earnings from big-tech firms including Amazon, Alphabet Inc. and Meta Platforms Inc. kept investors on the edge this week.
And despite largely topping analysts’ estimates, Apple still warned of a holiday slowdown. But disappointing corporate reports are not enough to prompt a Fed pivot, according to Andrew Patterson, senior international economist at Vanguard.
“The Fed is looking for signs of easing or weakening pressures in the broader economy, in financial markets,” Patterson said by phone.
“Weak earnings is no reason for them to take their foot off the tightening accelerator. In fact, it gives them hope that they are having the intended impact.”
Read More: US Core PCE Inflation Picks Up While Consumers Show Resilience
Beyond the US
The ECB delivered a second straight 75 basis-point hike on Thursday but dropped a prior reference to rate increases continuing for “several meetings,” an outcome that was considered dovish.
The central bank has a small margin for error after German inflation unexpectedly accelerated this month to 11.6% from a year earlier — far exceeding all estimates in a Bloomberg survey whose median forecast was 10.9%.
The Bank of Japan held its negative rate, 10-year yield cap and asset purchases at the end of a two-day policy meeting, in line with the view of 49 economists surveyed by Bloomberg.
Chinese assets remain in focus, with foreign investors dumping a record amount of mainland China stocks this week and sending Hong Kong equities to a 13-year low.
President Xi Jinping’s tightening grip on power hasn’t had the same impact domestically, with mainland investors hunting for bargains in Hong Kong.
Some of the main moves in markets:
Stocks
- The S&P 500 rose 1.2% as of 10:34 a.m.
New York time
- The Nasdaq 100 rose 1.4%
- The Dow Jones Industrial Average rose 1.7%
- The Stoxx Europe 600 fell 0.2%
- The MSCI World index fell 0.3%
Currencies
- The Bloomberg Dollar Spot Index rose 0.3%
- The euro was little changed at $0.9956
- The British pound was little changed at $1.1558
- The Japanese yen fell 0.9% to 147.56 per dollar
Cryptocurrencies
- Bitcoin rose 0.5% to $20,501.84
- Ether rose 0.5% to $1,535.85
Bonds
- The yield on 10-year Treasuries advanced seven basis points to 3.99%
- Germany’s 10-year yield advanced 14 basis points to 2.11%
- Britain’s 10-year yield advanced six basis points to 3.46%
Commodities
- West Texas Intermediate crude fell 1.3% to $87.94 a barrel
- Gold futures fell 1.2% to $1,645.40 an ounce
–With assistance from Michael Msika, Kurt Schussler, Allegra Catelli, Cecile Gutscher, Brett Miller and Reade Pickert.
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