Stock Market

S&P 500 futures gain as Meta leads a rally in tech shares

Powell didn't fight back against stock market, says Jeffrey Gundlach

S&P 500 futures gained on Thursday as better-than-expected Meta results further improved sentiment around technology shares, which led the market lower last year.

The gains were kept in check as investors awaited a trio of Big Tech results after the bell in Apple, Amazon and Alphabet.

S&P 500 futures jumped 0.7%, while the tech-heavy Nasdaq-100 futures gained 1.7%. Meanwhile, futures connected to the Dow Jones Industrial Average fell 37 points, or about 0.1%.

Meta surged more than 19% in premarket trading after reporting a fourth-quarter beat on revenue and announcing a $40 billion stock buyback. That helped investors look past losses in the business unit overseeing the metaverse.

Other mega-cap tech stocks rose on the back of those results. Shares of Google-parent Alphabet were up more than 4% in premarket trading, while Amazon jumped more than 3%. Apple shares climbed more than 1%.

Tech stocks have outperformed in 2023, buoyed by recent signals of cooling inflation that investors expect could suggest a pause from the Federal Reserve in its aggressive rate hiking campaign. The S&P 500 information technology sector is up more than 11% this year after a decline of more than 28% last year.

Still, the Fed gave no indication of an upcoming pause in rate hikes after announcing a 0.25 percentage point interest rate hike on Wednesday. Stocks traded higher on the news as the decision marked a pull back from the 0.5 percentage point increase at December’s meeting.

“Traders think the Fed is behind the curve and that inflation threat is receding rapidly,” said Jamie Dutta, market analyst at Vantage. “The Fed is open to changing its mind and may have to if the economy loses momentum.”

Investors will watch Thursday for earnings reports from household names including Apple, Alphabet, Amazon, Ford Motor and Starbucks.

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