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Indexes jump on inflation data; Nasdaq posts best qtr since 2020

Published 03/31/2023, 05:20 AM
Updated 03/31/2023, 07:56 PM
© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 30, 2023. REUTERS/Brendan McDermid

By Caroline Valetkevitch

NEW YORK (Reuters) - Wall Street rallied more than 1% on Friday and the Nasdaq notched its biggest quarterly percentage gain since June 2020, as signs of cooling inflation bolstered hopes the Federal Reserve might soon end its aggressive interest rate hikes.

The S&P 500 closed at its highest level since Feb. 15 and posted a second straight quarter of gains, led by the technology sector's 21.5% rise in the first quarter.

The quarterly gains came despite a sharp sell-off in bank stocks following the collapse of two regional banks earlier this month and worries about a potential bigger financial crisis.

The S&P 500 financial sector was the quarter's worst-performing sector, posting a 6.1% drop, while the KBW regional bank index fell 18.6% for the period.

The Commerce Department report Friday showed U.S. consumer spending rose moderately in February while inflation cooled.

"The equity market seems to be delighted with the slight tick lower in inflation, as it should be. It underscores that the Fed's campaign is, in fact, working, albeit slowly," said Quincy Krosby, chief global strategist at LPL Financial (NASDAQ:LPLA) in Charlotte, North Carolina.

The Fed has been raising rates to cool inflation. Expectations for a 25 basis point rate hike at its May meeting dipped to about 50%, with no hike seen to be just as likely.

The Dow Jones Industrial Average rose 415.12 points, or 1.26%, to 33,274.15, the S&P 500 gained 58.48 points, or 1.44%, to 4,109.31 and the Nasdaq Composite added 208.44 points, or 1.74%, to 12,221.91.

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For the week and month, stocks also posted strong gains. The Nasdaq was up 6.7% for March.

For the quarter, the Nasdaq jumped 16.8% in its biggest quarterly percentage increase since the three months ended June 2020. The S&P 500 gained 7% and the Dow rose 0.4% in the quarter, based on the latest available data.

S&P 500 sectoral performance in Q1, https://www.reuters.com/graphics/STOCKS-QUARTER/egpbyjdlwvq/chart.png

Semiconductors were among the quarter's strongest performing stocks, with the Philadelphia semiconductor index rising 27.6%.

Shares of big tech gained as investors rotated out of banks and as U.S. Treasury yields eased, with the two-year note yield posting on Friday its largest monthly drop since 2008. Higher yields tend to be a negative for big tech companies.

Apple Inc (NASDAQ:AAPL) shares ended up 1.6% on Friday, rising along with other megacaps. It also won its appeal against the decision by Britain's antitrust regulator to launch an investigation into its mobile browser and cloud gaming services.

Also on Friday, Boston Fed President Susan Collins said that wherever the U.S. central bank stops with its rate rises, maintaining that level for some time will be critical in helping to lower high inflation back to the 2% target.

Volume on U.S. exchanges was 11.98 billion shares, compared with the 12.74 billion full-session average over the last 20 trading days.

Advancing issues outnumbered decliners on the NYSE by a 4.78-to-1 ratio; on Nasdaq, a 2.45-to-1 ratio favored advancers.

The S&P 500 posted 19 new 52-week highs and no new lows; the Nasdaq Composite recorded 81 new highs and 131 new lows.

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Latest comments

Kids today are entitles to get their next iPhone.
stock pickers paradise - so many stocks were treated unfairly. we are back above 4104!
lol 5% rate is enough to kick all financial parasites to trash bucket
Green everyday till the day you buy because market movers use trading software program to trap retail bulls and sell off on news
People have no idea what is coming. I remember right before COVID there was so much bullishness then…. Circuit breakers
you are investing.coms version of the people who used to walk around wearing 'the end is near' signs. impossible to take seriously..
What color is the sky in your world maximus?
dave nightsky is clear with a few stars. looks like a nice and sunny day tomorrow
guys do not cry later if u do not believe me. dow will hit @ 35000 by month end.
wow, the doom and gloom is strong with some of you people.. even michael burry admits he was wrong about last/this year.. not everything is fraud and manipulation.. off with the tinfoil hats and space blankets, and get out and enjoy the sun for a bit.. there is cause for some optimism after a long period of fear, doubt, and resentment.
 "main reason" is Russian aggression.  "Just as the economy began to level out and supply chain issues started to heal, a major foreign conflict occurred. This caused the perfect storm of demand-pull and cost-push inflation, causing some of the highest inflation rates in history."  --  www.entrepreneur.com/money-finance/why-is-inflation-so-high-right-now/444482
some people don’t need to read news articles to understand basic economics and how the creation of money is mostly responsible for overall inflation
  Some people (like me & the op) look beyond the "creation of money" and look also at the speed of and where that money is flowing, and why that money was created.  These people tend not to listen to political propaganda and conspiracy nut job media.
Any question about manipulation with JP Morgab having 40,000 call options expiring today with 4065 strike, look at the markets right now
vetter I made a similar bet.....so I must be guilty of market manipulation too????right,..ha ha ha.......you say some of the most parinoid statements it's you and mitch against the world....
Ok so we are pretending the banking crisis is over...Got it!. "Everyone seems happy to close their eyes and pretend that the crisis is over despite so much evidence to the contrary..."
change in market direction will happen when and if there is a precieved increase in risk....until that happens this market should flirt with higher prices...
The ultimate incarnation of Charles Ponzi's scheme continues to DEFRAUD America in broad daylight.
iI see mitch is still with his perennial complaints and showing his ignorance of how and why markets move the way they do.....
has anyone noticed that the only time the Republicans are concerned about debt is when they are not in control of the government.... during the last Republican administration (Trump)and government control ,,they added over 20% to the debt (over +5 trillion dollars).......one of the worst in modern American history...
They also had no concern for national debt when they cut taxes for the rich early in Trump's term.
 Cutting taxes for small business owners is very helpful since they employ the most people.  Saying that is helping the "rich" is an old, weak Marxist talking point.
  The responsible gov't should use taxes to pay down debt when economics times are good and demand is high, so it has room to cut taxes & increase debt & increase spending when economic times are bad and demand is low.
I'm curious to see the results of the banks in this 1st quarter. Will they come with mega profits?
andre, in the end..the banks will tell the tale where the markets are going...
Denial runs deep in many.
LOL!!! policy hopes!! what a joke! the fed has raised at every meeting the economy is gone. upbeat quarter because of what they will do. when the only thing you should be focusing on is what they DID.
you guys right but dow will hit 35000 soon. as per all data. job. inflation control. no rate hike. good gdp
What a laughing stock. as if what they haven't ALREADY done isn't a death sentence. It doesn't matter what the data says. What they've already done will sink the US economy. When they stop makes absolutely no difference.
john it DOES matter when they stop.....it will have everything to do with how much their policies have affected the economy....and inflation.
It will certainly affect my trades.
Powell opened up daily swap lines two weeks ago. He is buying up U.S. treasuries(debt) and flooding the world with freshly created dollars. His balance sheet is unsustainable. Who can he resell the debt to, when we're selling fresh debt. The entire fiasco is unsustainable.
A nation and an economy built on debt! A weak foundation at best. Cash is King!
presently, the markets are indicating there is rising interest in the debt markets...
ronald, the USA has almost always(+200 years )had an economy built on debt...there has been only one short period in the 1830s. that America has not had a sizable national debt....
powelgood speech today
inflationary datas takes months to digest but suddenly jyst one month positive data erase the bank crusis fear, inflation, recession and negative revenues ........
Mom was positive, but Yoy went nowhere.
Ease, not "erase".
AAPL, NVDA, MSFT.... alone have contributed to 91% gain on the SPY this year. Well, If you remove these 3 companies from the index? How would SPY be?  hahahahaha
You can look at SPXEW & see no big difference there to SPY.
Funny only the “bad” news is priced in until “savy investors” realize the “bad” news is actually good news hours later when the “fears ease” and are “shrugged off.” It would be laughable if it wasnt so criminal. Predictable, fraudulent JOKE!
...shrugging off bad news is also  good for a 500 point gain. No need to have good news at all. Typical for these phony rigged markets.
Market optimism is criminal?
everyday market goes up 1% it's free money.
Inflation prints above 10% will be the new normal. Enjoy watching your ponzi scheme collapse, boomers and Gen X.
More than half of boomers are solely reliant on Social Security for income and have cashed out their home equity. For more than of half Gen Xers, the primary years in the workforce were gaps in employment from one recession after another.
what Are you two? millennials?
Review your basic skills for interpreting simple data. But sure, why not, add one generation after another for sources of resentment.
it still went up. wen negative inflation data? cutting prices.
Welcome to Friday FRAUD, where the Wall Street criminals have an impeccable record sending America into the weekend with a financial knife in the back.  Of course, nothing was "priced in" as savvy "investors" were "waiting for the FED."  Greatest financial fraud in history, and BIGGEST INVESTMENT JOKE IN THE WORLD.
A knife in your back is a true pleasure 💀💀
I am happy it’s going up.
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