Stocks pushed higher on Thursday, allowing the S&P 500 to break a four-session losing streak. Strong earnings from Nvidia (NVDA) gave a boost to technology stocks and bolstered overall sentiment.
The Nasdaq Composite (COMP.IND) closed +0.7%, the S&P 500 (SP500) finished +0.5% and the Dow (DJI) ended +0.3%.
The Nasdaq recorded its second consecutive day of gains, rising 83.33 points to finish at 11,590.40. The Dow Jones rose 108.82 points to close at 33,153.91, while S&P 500 advanced 21.27 points to end at 4,012.32.
Seven of the 11 S&P sectors ended in the green. Info Tech led the advance, climbing by 1.6%, with another larger-than-1% rally coming from Energy. Communication Services, Utilities and Consumer Staples posted modest declines.
“The stock market experienced another day of volatility, with investors taking advantage of buying opportunities following a decline of over 4% since the beginning of the month,” analyst Leo Nelissen of BN Capital told Seeking Alpha. “Strong earnings in the technology sector have provided some encouragement that the market is robust enough to endure a more aggressive Federal Reserve policy.”
Nelissen added: “There is now an 80% implied probability of the Fed funds rate exceeding 5.00% by the end of this year, a significant increase from the 0% probability earlier this year. With inflation continuing to persist and economic growth remains strong enough to prevent a shift in Fed policy, the market is expected to remain range-bound, as the risk/reward ratio becomes unfavorable above 4,000 points. I’m prepared to put money to work in the low to mid-3,000 points range.”
The major U.S. equity averages dropped earlier this week, and have seen generally sluggish trading lately, amid concerns that the Federal Reserve would need to keep its hawkish stance longer than previously expected. On Thursday, the 14% rally in NVDA, encouraged by a strong quarterly update, helped lift the broader market.
On the economic front, the government released fresh data about Q4 GDP. The figures showed that economic growth for the final three months of the year was revised down to 2.7%, compared to the 2.9% that economists had predicted.
Investors also digested new info about the labor market. Initial jobless claims dipped to 192K versus an the 200K figure that was expected.
Trading in the bond market was muted. The 10-year Treasury yield (US10Y) dropped 5 basis points to 3.87%. The 2-year yield (US2Y) was down about a basis point to 4.69%.
Beyond NVDA, other stocks staged meaningful moves in the wake of their quarterly reports. This included Wayfair (W), with shares of the retailer plunging more than 20% following a wider-than-expected loss.