Stocks soar on hopes that Fed will slow rate hikes

New York
CNN Business

A disastrous earnings report from Snap and less-than-inspiring results from Dow components American Express and Verizon weren’t enough to keep Wall Street bulls at bay on Friday. Stocks rose on hopes that the Federal Reserve may soon come to the rescue by slowing the pace of its rate hikes.

The Dow rose nearly 750 points, or 2.5%, even as AmEx ( AXP ) and Verizon ( VZ ) fell nearly 2% and 5%, respectively. The Dow has now won for the past three weeks, its longest weekly winning streak of the year.

It was a broad-based rally, with all sectors rallying. In fact, Verizon and AmEx were the only two Dow stocks not in the green Friday. Blue chip stocks Exxon Mobil (XOM), health insurer Cigna (CI), Big Pharma stock Eli Lilly (LLY) and defense contractor Northrop Grumman ( NOC ) even hit new all-time records.

Also Read :  Tom Ford is a newly minted billionaire, thanks to the $2.8B Estée Lauder deal

Shares opened lower but were quickly off to the races after one The Wall Street Journal The report indicated that while the Fed is likely to raise interest rates by another three-quarters of a point in November, Fed members are debating whether to signal that a smaller hike could be in the cards in December.

Investors have started to get nervous that the Fed’s series of unprecedented rate hikes could tip the economy into recession. And apparently some at the Fed also have doubts about the pace of rate hikes.

Reuters reported that San Francisco Fed President Mary Daly said in a speech on Friday that the central bank should not create an “unforced downturn” for the economy with too many massive rate hikes.

Also Read :  Justice Department Secures Settlements with CarMax, Axis Analytics, Capital One Bank and Walmart for Posting Discriminatory Job Advertisements on College Recruiting Platforms | OPA

Long-term bond yields also pulled back slightly after the yield on the 10-year Treasury note hit its highest level since late 2007.

“The market has been looking forward to the Fed taking a break,” said JJ Kinahan, CEO of IG Group North America, which owns online brokerage firm tastyworks.

“I think the right call is to let the rate hikes they’ve already done play through the system a little bit and see what shakes out,” Kinahan added.

The Nasdaq and S&P 500 also rose, rising 2.3% and 2.4%, respectively. All three major market indexes are now up about 5% for the week, their biggest gains since June, and has shown solid gains for the month of October.

Also Read :  Dow Jones Rallies 400 Points, What To Do Now; 4 Tech Titans Report Earnings

That’s despite the fact that Snapchat’s parent company ( SNAP ) plunged nearly 30% after its earnings, news that also sent shares of other social media companies spiraling downward. Facebook owner Meta fell more than 1% and Pinterest ( PINS ) fell 6%.

Twitter (TWTR) also fell nearly 5%, amid reports that the Biden administration may closely scrutinize Elon Musk’s other companies for national security reasons before allowing Musk to buy Twitter (TWTR). There were also reports suggesting massive layoffs at Twitter ( TWTR ) if Tesla ( TSLA ) and SpaceX CEOs close the deal.


Leave a Reply

Your email address will not be published.