New York, New York – The stock market saw a strong close on Friday, with the S&P 500 reaching its highest close ever at 4,959. Despite a rocky week of trading, all three major indexes finished the week with gains.
The market initially experienced a downturn following underwhelming tech results from companies like Microsoft and Alphabet, which saw further sell-offs when Federal Reserve Chair Jerome Powell stated that an interest rate cut in March is not the “base case.”
However, the market quickly rebounded with blowout earnings from Meta and Amazon, combined with a better-than-expected January jobs report, leading to a rally in stock prices.
For the week, the S&P 500 and Dow Jones Industrial Average rose over 1%, while the Nasdaq Composite gained just under 1%.
Looking ahead, a number of corporate earnings reports, including those from Eli Lily, Disney, Spotify, McDonald’s, Chipotle, and Pepsi, are expected to greet investors in the upcoming week, with a light economic schedule.
In the ongoing discussion about a potential interest rate cut, Federal Reserve Chair Jerome Powell recently made comments that further dampened investor hopes for a March rate cut. Economists believe that the strong January jobs report supports the case for delaying an interest rate cut, but also raises concerns about resurging inflation as wages experienced a significant increase.
Investors have adjusted their expectations for a March rate cut, with the chance decreasing from nearly 80% a month ago to about 15% currently.
In a positive development, corporate earnings seem to be turning a corner, with a number of companies reporting strong earnings over the past week. This has also resulted in a more positive outlook for earnings growth in the first quarter.
Looking at the economic front, the upcoming week will see fewer economic data points, with a focus on initial jobless claims and an update on activity in the services sector.
Overall, the stock market continues to navigate through a series of ups and downs, with investors closely watching corporate earnings, inflation, and the potential for a change in interest rates.