US stocks were mixed on Thursday, highlighted by a bullish vault in tech stocks following the latest Federal Reserve interest rate hike and ahead of another batch of gains from the tech industry’s biggest players. .
The tech-heavy Nasdaq Composite (^IXIC) soared nearly 3% in midday trading. The S&P 500 (^GSPC) added 1.3%, while the Dow Jones Industrial Average (^DJI) lagged, falling 0.4%.
The yield on the benchmark 10-year US Treasury note dipped to 3.358% on Thursday morning. The dollar index rose 0.12% to $101.33
The major US stock averages closed higher on Wednesday after the Federal Reserve’s much-anticipated rate hike to 25 basis points, marking another slowdown in its campaign to fight inflation. Upbeat comments from Chairman Jerome Powell on the state of inflation moved markets higher.
The Fed’s decision follows recent economic data showing more evidence of a slowdown in inflation in recent months, though Powell stressed that the Fed’s campaign is far from over.
The macro picture was mixed on Wednesday, with the latest ISM manufacturing PMI dipping and missing consensus expectations. Meanwhile, private payrolls added 106,000 jobs in January, below the 170,000 expected by economists.
The next major event on the macro front is Friday’s January jobs report, which will be critical for investors to further assess whether there is evidence of easing in the labor market.
The December jobs report showed the labor market remains strong, with employers adding 233,000 jobs for the month and an average monthly increase of 375,000 over the past year.
The number of Americans filing new jobless claims fell to 183,000 for the week ending Jan. 28, the Labor Department said Thursday, below the 195,000 expected by economists.
On the earnings front, Meta Platforms (META) reported post-bell fourth-quarter results that beat revenue expectations while delivering a $5 billion expense cut. He also announced a $40 billion share buyback. Shares of the social media giant rose more than 23% in midday trading Thursday morning.
The heaviest weight constituents of the S&P 500 — Amazon (AMZN), Apple (AAPL), Alphabet (GOOG) — are preparing to report quarterly results on Thursday after the bell. All were up at least 3% in early trading.
Merck & Co. (MRK) posted better-than-expected fourth-quarter earnings but forecast weaker near-term earnings, sending shares lower on Thursday. The company reported adjusted earnings of $1.62 per share, down 10% from the same period last year but above consensus estimates of $1.54 per share. Merck said revenue rose 2% to $13.83 billion, versus forecasts of $13.67 billion.
Separately, Eli Lilly (LLY) on Thursday reported better-than-expected fourth-quarter earnings and raised its full-year earnings forecasts. Eli Lilly said adjusted earnings for the quarter were $2.09 per share, versus the general forecast of $1.78. Revenue fell 8.75% from last year to $7.3bn, a slight miss of expectations of $7.33bn.
Overall, the fourth-quarter earnings season appears to be picking up, said Andrew Tyler, US market intelligence team at JP Morgan. But he said the question remains: “Will investors chase the current soft landing and rally narrative?”
The tech results come as layoffs have become apparent in recent months in this sector, as companies large and small cut staff to cope with slowing growth after record profits during the pandemic. The total number of cut tech jobs has been 41,829 in the past month, the highest across any industry, according to a report by Challenger, Gray & Christmas Inc.
Elsewhere, shares of Carvana (CVNA) rose as much as 33% on Thursday morning, taking the online used car seller’s year-to-date profit to more than 280%.
Meanwhile, abroad, the Bank of England followed the Fed in the US by raising interest rates by 0.5% to 4%, the highest level in 14 years. The 3.5% increase was highly anticipated by economists. It is the bank’s 10th consecutive rate hike as it continues to try to rein in record inflation.
The European Central Bank, the central bank for the 20 countries that share the euro, raised interest rates another half percentage point to 2.5%, in line with market expectations. The next rate hike would be the same size, the ECB said.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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