NEW YORK: Wall Street’s main indexes gained on Friday as a slide in longer-dated Treasury yields boosted megacap growth stocks, while investors looked forward to key economic data next week for more cues on the monetary policy path.
Equities bounced back from a sharp decline on Thursday, when hawkish comments from Federal Reserve Chair Jerome Powell had ended the longest winning streak in two years for the S&P 500 and the Nasdaq.
Powell’s remarks, which highlighted the possibility of further tightening if needed, led traders to re-assess expectations of rate cuts from the Fed.
However, they are still pricing in 62% odds of an at least 25 basis point rate cut in June, per the CME Group’s FedWatch tool.
Supporting equities, the yield on the benchmark 10-year Treasury note eased to 4.6161% after a jump on Thursday which was also driven by a weaker-than-expected 30-year bond auction.
Megacap growth stocks led the charge, with Nvidia, Amazon.com and Microsoft gaining between 1% and 1.9%.
Ten of the 11 major S&P 500 sectors traded higher, with information technology up 1.6% and in the lead.
Healthcare stocks lagged the broader market, falling 0.5%.
“We’re just seasonally into a better part of the market. We had a pretty good correction in October (and) it does feel like the markets want to try and rally as we go into year end,” said Steve Wyett, chief investment strategist at BOK Financial.
After a week which has been largely bereft of economic data, investors have turned their focus to reports on consumer and producer prices as well as retail sales in the coming days, which will further shape interest rate expectations.
Data on Friday showed US consumer sentiment fell for a fourth straight month in November, and households’ expectations for inflation rose again.
“While the direction continues to be somewhat lower, inflation is still well above the Feds 2% target. We don’t see inflation falling far enough that the Fed’s going to be able to begin thinking about lowering rates anytime soon,” Wyett added.
At 11:42 a.m. ET, the Dow Jones Industrial Average was up 135.06 points, or 0.40%, at 34,027.00, the S&P 500 was up 27.81 points, or 0.64%, at 4,375.16, and the Nasdaq Composite was up 135.45 points, or 1.00%, at 13,656.90.
Plug Power plunged 41.2% after the hydrogen fuelcell maker raised going concern doubts.
Illumina shares dropped 13.7% as the gene-testing company trimmed its full-year profit forecast for the second straight quarter.
Advancing issues outnumbered decliners by a 1.52-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.11-to-1 ratio on the Nasdaq.
The S&P index recorded 19 new 52-week highs and 15 new lows, while the Nasdaq recorded 35 new highs and 267 new lows.
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