By Yasin Ebrahim
Investing.com -- The S&P 500 climbed Friday, led by tech as the broader market shrugged off Federal Reserve officials calling on the central bank to get even more aggressive on rate hikes that many fear could slow the economy too much.
The S&P 500 rose 1.5%, the Dow Jones Industrial Average gained 0.2%, or 63 points, the Nasdaq rose 0.7%.
Tech continued to its comeback to remain on course to snap a two-week losing streak as investors continued to pile into big tech.
Meta Platforms (NASDAQ:FB) led the pack up more than 3%, following by Amazon (NASDAQ:AMZN), Apple Inc (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT), up more than 1% each.
Chip stocks were also in the ascendency, supported by a nearly 6% gain in Nvidia (NASDAQ:NVDA) as the chipmaker extended its rally for a fourth straight day.
Growth sectors of the market like tech were also helped by falling interest rates even as Fed officials urged the central bank to do even more.
Federal Reserve Governor Christopher Waller on Friday called on the Fed to consider more aggressive rate hikes and get balance sheet reduction underway to make a dent in the pace of the inflation.
The remarks arrived on the heels of remarks from St. Louis Fed President James Bullard, who suggested the Fed hike rates by 50 basis points several times this year to push the central bank’s rate to 3% by year end.
That would be well above the Fed’s current outlook for rates to reach about 1.9% by year end.
Industrials struggled to join in on the broader market rally pressured by weakness in defense stocks and a slump in FedEx.
FedEx (NYSE:FDX) fell more than 5% after reporting quarterly results that missed both the top and bottom lines as higher labor costs hurt results.
Defense stocks including Huntington Ingalls Industries (NYSE:HII) and L3Harris Technologies Inc (NYSE:LHX) were down more than 2% as investors appeared to be pricing in the prospect of progress on Ukraine-Russia peace talks that could prove key to ending the war.
Stocks are expected to have a volatile end to the session as triple witching -- when stock options, stock index futures, and index option contracts expire on the same day -- usually triggers wild moves as investors move out of old positions and take new ones.
The rally in the broader market has stoked debate on whether this is the start of a bottoming process, or further downside lies ahead.
Market technicians, however, urge caution on reading too much into the rally as options expiry tends to muddy market movements. Technical indicators including volumes and market breadth have yet to improve significantly to signal that the market is establishing a bottom.
“If this is the beginning of something more broad based, you’d want market breadth conditions to improve meaningfully … volume being strong as the price is going higher, but I think the jury's still out on that," Chief Market Strategist David Keller at StockCharts told Investing.com in an interview on Friday.
“At at this point, I'm still thinking of it as a tradable bounce within a downtrend.” Keller added.