New York, NY – Wall Street’s recent surge shows no signs of abating as investors’ hopes of a pause in the Federal Reserve’s interest rate hikes continue to drive the market. In late trading on Thursday, the S&P 500 index surged by 1.8%, marking a remarkable 4.8% gain for the week and potentially setting it on course for its most robust weekly performance in nearly a year. This positive momentum has also benefited the Dow Jones Industrial Average and the Nasdaq Composite, both of which experienced substantial gains.
The rally gained momentum on the back of the Federal Reserve’s decision to maintain current interest rates and Chair Jerome Powell’s indications of a potential halt in rate hikes. The CME Group’s FedWatch tool currently signals an 83% likelihood of the Fed keeping rates steady in December.
Aside from the Federal Reserve’s stance, corporate earnings reports have played a pivotal role in boosting investor confidence. Tech behemoth Apple (NASDAQ:AAPL) garnered considerable attention with its after-hours quarterly report. Despite concerns about its performance in China, Apple exceeded Wall Street’s expectations, driven by robust sales of its iPhone, particularly the iPhone 15 Pro and Pro Max models, which faced supply constraints. Additionally, a substantial $1 billion surge in services revenue offset notable declines in Mac and iPad sales.
Starbucks (NASDAQ:SBUX) and Qualcomm (NASDAQ:QCOM) stocks witnessed sharp increases following better-than-expected fourth-quarter results, with Starbucks surpassing revenue and earnings projections. Shopify (NYSE:SHOP) also reported an impressive third-quarter profit attributed to the successful adoption of artificial intelligence (AI), resulting in a 15% surge in its share price.
Moreover, the 10-year Treasury yield dipped to a two-week low, coinciding with futures on major US stock indexes rising in response to Powell’s statements. Justin Burgin, a strategist at Ameriprise Financial (NYSE:AMP), highlighted Powell’s remarks and the encouraging corporate earnings as the driving forces behind the market’s optimism.
Nonetheless, it is worth noting that Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co., issued a cautionary note during his interview with Yahoo Finance, warning of potential rate hikes. Despite the current market optimism, Dimon emphasized that lingering uncertainties still persist in the financial landscape.
