TOPLINE
Several large technology stocks soared Friday to their highest level this year as blockbuster earnings and uplifting economic data kept the blistering stock market’s momentum going.
KEY FACTS
Shares of Alphabet (up 3%), Meta (up 4%) and Intel (up 6%) each set 2023 highs as investors digested the Silicon Valley firms’ earnings reports earlier this week with a smile.
Airbnb, DoorDash, DraftKings, Intuit and Roku also rallied to their highest share price of the year Friday, gaining 3% or more.
In addition to earnings, Friday’s release of the personal consumption expenditures inflation metric helped boost stocks, as it revealed price increases moderated to their lowest level in about two years last month.
The tech-heavy Nasdaq notched a 2% gain by late afternoon, while the Dow Jones Industrial Average and S&P 500 rose roughly 1% apiece.
CRUCIAL QUOTE
Strong economic output growth, a “better-than-expected” earnings season and moderating inflation “could be the catalyst to send the market to new highs,” Bolvin Wealth Management president Gina Bolvin wrote in emailed comments Friday.
KEY BACKGROUND
The stock market’s strong week came even as the Federal Reserve bumped interest rates to a 22-year high Wednesday. Equity prices historically fall in periods of higher rates as it makes corporate borrowing more expensive and thus cuts into profits, but investors have supported the notion that artificial intelligence-driven growth and a renewed commitment to cost-cutting will prop up long-term growth.
SURPRISING FACT
The Dow’s 13-day winning streak came to an end Thursday, capping the longest positive stretch in 36 years. The Dow is up 7% over the last two months, its best two-month since last October and November.
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CONTRA
Energy giants Chevron and Exxon did not join in on the fun Friday, as their stocks slid roughly 1% apiece after both companies reported a roughly 50% year-over-year decline in profits. Energy is one of three S&P sectors down year to date and is the worst returner of the index’s 13 sectors over the last five years.
WHAT TO WATCH FOR
Apple, the world’s most valuable company, reports quarterly numbers Thursday. Other notable earnings next week include Pfizer, one of the worst-performing stocks of the year as Covid-19 vaccine demand dwindles, and Anheuser-Busch, whose shares are down about 10% over the last three months as Bud Light sales dwindled amid controversy.