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S&P 500 jumps on tech rally as Powell offers scant new clues
© Reuters
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 repeat 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.
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Comments (11)
ferney Restrepo
Feb 07, 2023 4:27PM ET
I love see the bears crying because the market is going up. lol.
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Gerben Dijkgraaf
Feb 07, 2023 4:27PM ET
Dumb money index gives a clue who are buying and selling in these rallies. Big Cry time for bulls is coming soon enough (but just not yet).
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Ross Dre
Feb 07, 2023 4:25PM ET
Powell: this will be a hard fought battle against inflation. We’re committed to 2%. Market hears: We’re going to cut rates and reinitiate asset purchases and rate cuts immediately.
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First Last
Feb 07, 2023 4:25PM ET
If market heard that, it would be up >5% today.
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Mario tragik
Feb 07, 2023 4:25PM ET
Market (cover its ears) : la la la la la la bla bla bla
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Mario tragik
Feb 07, 2023 4:22PM ET
This is ludicrous and criminal, worst than a ponzi scheme. at least a ponzi can be persecuted, this plain robbery on plain daylight!!!
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First Last
Feb 07, 2023 4:19PM ET
Too many are trading/posting what they think Powell should say and not realizing how irrelevant they are; the key is to figure out what Powell would say.
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First Last
Feb 07, 2023 4:19PM ET
"Powell offers scant new clues" -- In the market, no news is often good news.
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First Last
Feb 07, 2023 4:19PM ET
To the easily triggered, "no news" is manipulation.
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First Last
Feb 07, 2023 4:19PM ET
Market may be up not from Powell, but the anticipation of Biden's State of the Union @ 9 pm.
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Chris Johnson
Feb 07, 2023 4:15PM ET
The market always finds an excuse to rally... pump, pump
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Casador Del Oso
Feb 07, 2023 4:02PM ET
I get it now. If you aren't VERY hawkish then, by default, you are dovish.
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TheEnd IsNigh
Feb 07, 2023 4:02PM ET
Just like if you're not a Democrat you **HAVE** to be a Republican. Black and white, binary thought processes. Welcome to the modern era where algos from social media create deeper division each day.
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Casador Del Oso
Feb 07, 2023 3:58PM ET
2YR at 4.47% and rising. Yet tech still has buyers even after dismal earnings. Better you than me!
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Andre Luiz
Feb 07, 2023 3:57PM ET
WTF !!! "Powell offers scant new clues". He said new rises will come. Intraday 100% manipulated.
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JIM VETTER
Feb 07, 2023 3:52PM ET
The first paragraph says it all. . The answer is massive manipulation
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