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S&P 500 jumps on tech rally as Powell offers scant new clues

Published Feb 07, 2023 03:15PM ET Updated Feb 07, 2023 03:35PM ET
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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. 

S&P 500 jumps on tech rally as Powell offers scant new clues
 

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Comments (11)
Sandro Pop
Sandro Pop Feb 07, 2023 4:30PM ET
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Buy the shares while they're cheap.
ferney Restrepo
ferney Restrepo Feb 07, 2023 4:27PM ET
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I love see the bears crying because the market is going up. lol.
Gerben Dijkgraaf
Gerben Dijkgraaf Feb 07, 2023 4:27PM ET
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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).
Ross Dre
Ross Dre Feb 07, 2023 4:25PM ET
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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.
First Last
First Last Feb 07, 2023 4:25PM ET
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If market heard that, it would be up >5% today.
Mario tragik
Mario tragik Feb 07, 2023 4:25PM ET
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Market (cover its ears) : la la la la la la bla bla bla
Mario tragik
Mario tragik Feb 07, 2023 4:22PM ET
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This is ludicrous and criminal, worst than a ponzi scheme. at least a ponzi can be persecuted, this plain robbery on plain daylight!!!
First Last
First Last Feb 07, 2023 4:19PM ET
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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.
First Last
First Last Feb 07, 2023 4:19PM ET
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"Powell offers scant new clues"  --  In the market, no news is often good news.
First Last
First Last Feb 07, 2023 4:19PM ET
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To the easily triggered, "no news" is manipulation.
First Last
First Last Feb 07, 2023 4:19PM ET
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Market may be up not from Powell, but the anticipation of Biden's State of the Union @ 9 pm.
Chris Johnson
Chris Johnson Feb 07, 2023 4:15PM ET
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The market always finds an excuse to rally... pump, pump
Casador Del Oso
Casador Del Oso Feb 07, 2023 4:02PM ET
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I get it now. If you aren't VERY hawkish then, by default, you are dovish.
TheEnd IsNigh
TheEnd IsNigh Feb 07, 2023 4:02PM ET
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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.
Casador Del Oso
Casador Del Oso Feb 07, 2023 3:58PM ET
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2YR at 4.47% and rising. Yet tech still has buyers even after dismal earnings. Better you than me!
Andre Luiz
Andre Luiz Feb 07, 2023 3:57PM ET
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WTF !!! "Powell offers scant new clues". He said new rises will come. Intraday 100% manipulated.
JIM VETTER
JIM VETTER Feb 07, 2023 3:52PM ET
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The first paragraph says it all. . The answer is massive manipulation
 
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