March 24, 2023

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The S&P 500 and Nasdaq rose as the Meta leads a rally in technology stocks

The S&P 500 rose Thursday as better-than-expected Meta results improved sentiment around technology stocks, which sent the market down last year.

The broader market index jumped 1%, while the Nasdaq Technology Composite advanced 2.5%. The gains come ahead of a trio of results from Big Tech after the bell at Apple, Amazon and Alphabet.

Meanwhile, the Dow Jones Industrial Average underperformed, dropping 170 points, or about 0.5%. The main indicator has been pulled from before merck stocks after the drugmaker issued a weak outlook on its most recent earnings results, despite beating estimates in earnings.

Meta rose more than 19% after a The fourth quarter outperformed revenue And the announcement of a $40 billion to buy back shares. This helped investors look to the past losses In the business unit that oversees Metaverse.

Other big tech stocks rose on the back of the results. Shares of Google subsidiary Alphabet rose more than 4%, while Amazon jumped more than 3%. Apple shares rose more than 1%.

Tech stocks outperformed in 2023, buoyed by recent signs of calming inflation that investors expect may signal the Federal Reserve’s aggressive campaign to raise interest rates. The S&P 500 Information Technology Index is up more than 11% this year after falling more than 28% last year.

“It shows that growth is outperforming value as it relieves some of the pressures that hawkish rhetoric has brought to risk markets over the course of 2022,” said Keith Buchanan, senior portfolio manager at Global Investments.

See also  US and European stocks rise on hopes the Fed will slow the pace of interest rate hikes

Wall Street came away with a winning session after the Fed announced on Wednesday Raise the interest rate by 0.25 percentage points. While the central bank gave no indication of an upcoming halt in rate hikes, investors were encouraged by the smaller increase and comments from Chairman Jerome Powell acknowledging easing inflation.

Traders await the latest jobs report on Friday which will give an insight into the labor market. Any signs of a slowdown could suggest to investors that further rate hikes are off the table.