Stock Market Today: Dovish Powell, Meta Earnings Power TechLead Rally, Apple On Deck

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Meta's renewed discipline, combined with Powell's renewed dovishness, sent tech stocks higher on Thursday before tripling after the close of trading.

US stock futures extended their gains on Thursday as the dollar fell against global peers and Treasury yields leveled off as markets around the world reacted to a dovish rate hike by the Fed. Federal and settled on the trio after large-cap tech stocks closed.

The Fed raised its benchmark rate to a range of 4.5% to 4.75% on Wednesday night, but little change in subsequent announcements suggests a focus on the "size" of future "temporary" rate hikes. , according to the Fed may be nearing the end of its most aggressive tightening cycle in four decades.

Stocks were expected to crash as Chairman Jerome Powell offered minimal resistance to market expectations for lower terminal yields and a year-end squeeze, helping the S&P 500 close 42.6 points higher to lift its base year. -Daily gain around 7.7%.

Powell's tone is much less aggressive than in previous news conferences, and his decision not to postpone two market rate cut forecasts in 2023, even though he said they were not part of his plans, and his suggestion of lower rates reached It peaked in the latest Fed forecast, despite that being said, "some" increases are needed, which has caused dove interest to rise.

His comments, albeit cautious, on easing price pressures have also been taken into account by market players, especially in the bond market.

“Financial conditions are influenced by many factors, not just our policies, and we will consider general financial conditions and many other factors when setting our policies.

The benchmark 10-year Treasury yield fell about 10 basis points as Powell spoke to reporters in Washington and opened 5 points lower at 3.373% in New York, while the 2-year note fell to 4.055%. The US dollar index, which tracks the dollar against a basket of global currencies, was down 0.08% at 101.137.

The CMEGroup FedWatch tool now assumes an 85.6% probability of another 25 basis point uptrend in March, but thinks it may be the last advance for the cycle, though Powell has hinted that "a few more" moves higher are preferable.

"Investors seem prepared to take on the Fed, that's one of the many Wall Street adages that seasoned traders tend to heed, and do so at their peril," said Chris Zaccarelli, CIO of the Alliance of Independent Advisers, to Reuters Charlotte. . North Carolina.

"The economy is much stronger than almost anyone expected, and that will push the Fed to go beyond tightening, which will prove to be a bigger risk to markets going forward, but for now we are on a risk diet." ", said. aggregate.

With Fed risks neutralized, at least for now, investors should focus on the top three tech gains (Amazon, Apple, and Google) after trading closes.

However, the employment data continued to cause confusion as weekly jobless claims for the period ending Jan. 28 fell by 3,000 to 183,000, well below the forecast of 200,000. at just 1.1%, again below economists' forecasts.

Central banks in Europe and the UK also made key decisions ahead of the trade, with the European Central Bank raising its main deposit rate by 50 basis points to a 2008 high of 2.5%, while adding that this would support interest rates sustainably and steadily increase significantly. interest rate.

Meanwhile, the Bank of England raised its key interest rate by 50 basis points to 4.5%, but backtracked on earlier promises to respond "vigorously" to inflation dynamics, suggesting it could be the peak of a rate increase cycle.

Towards the start of the trading day on Wall Street, futures contracts linked to the S&P 500 were up 29 pips at the open, while futures contracts linked to the lower Dow Jones Industrial Average gained 30 pips. still. repeat points. The technology-focused Nasdaq rose 215 points.

Platform Meta ( META ): Shares in Get Free Reports were the first notable driver of the market, which jumped 19.3% after the social media group plans to buy back a $40 billion stake in ad spending.

Apple ( AAPL ) - Get a Free Report shares rose 1.5% on the tech giant's highly-anticipated December quarter results after closing bell as investors braced for the shock of chain disruptions. last year's supply in China and near-term demand for high-end products. iPhone class.

Amazon ( AMZN ) - Shares of Get a Free Report rose 3.9% after closing fourth-quarter results, thanks in part to strong ad sales guidance from Meta Platform.

Another round of revenue, this time from the pharmaceutical sector, was also in the spotlight Thursday: Eli Lilly & Co. Guidance for full-year earnings rose year-over-year as sales of its flagship drug for the diabetes, Trulicity, continued to grow revenue and profits.

Merck & Co. ( MRK ) -- Get Free Report shares fell 1.2% after higher-than-expected earnings in the fourth quarter, helped by impressive sales of cancer-fighting blockbuster Keytruda, but expected decrease profits in the short term.

Meanwhile, shares of Honeywell International ( HON ) - Get a Free Report fell 3.6% on weak near-term earnings guidance and weak fourth-quarter sales, resulting in slightly better-than-expected earnings. .

In foreign markets, the European Stoxx 600 rose 0.55% in Frankfurt after the European Central Bank's rate decision, while the UK's FTSE 100 rose 0.67% in London, with the pound falling to 1 .2314 against the US dollar.

During overnight trading in Asia, the MSCI Non-Japan Regional Index rose 0.3%, while Japan's Nikkei 225 rose 0.20%.

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