Tech Rally Lifts Nasdaq 2%, S&P 500 Adds 1.4%

Barry Adams
02 Jun, 2022
New York City

U.S. stocks advanced and investors shook off Microsoft warnings and elevated oil prices and searched for bargains in tech stocks.  

The S&P 500 index 1.4% to 4,158.45 and the Nasdaq Composite index jumped 2.4% to 12,286.23. 

Tech stocks led the gainers and ignored Microsoft earnings and sales downward revision. 

Microsoft fell as much as 3% before recovering to 0.5% to $273.31 after the company said revenues and earnings are likely to be lower than the previous guidance on the foreign exchange adjustments. 

Diluted earnings per share in the fiscal fourth quarter ending in June is now expected to range between $2.24 and $2.34 from the previous estimate between $2.28 and $2.35. 

The rally in tech stocks lifted Zoom Video Communications 4.5% to $112.54, Nvidia Corp 5.9% to $194.08, and Tesla Inc 5% to $778.70. 

Meta Platforms gained 5.8% to $199.60 and Chief Operating Officer Sheryl Sandberg resigned after guiding the company for 14 years. 

Investors also parsed the latest earnings from Chewy, GameStop, MongoDB, PVH Corp, Victoria's Secret, and HP Enterprise. 

Chewy soared 21.6% to $28.57 after the online pet food seller reported a surprise profit and said active customer base expanded by 4.2% to 20.6 million. 

MongoDB jumped 17.8% to $284.90 after the database developer reported higher than expected sales and smaller than expected loss. The company also guided higher sales in the current quarter. 

PVH Corp, the maker of Calvin Klein and Tommy Hilfiger branded apparel, jumped 2% to $72.26 after the company beat the earnings estimates. 

Crude oil prices advanced $1.17 to $117.04 a barrel but natural gas prices eased 20 cents to $8.50 a unit.   

Oil was in focus and fell as much as 2% before recovering ahead of the OPEC+ meeting today on the speculation that the alliance of oil producing nations and Russia will increase supply to Europe replacing the banned oil imports from Russia. 

OPEC members agreed to bring forward the additional supply of 648,000 barrels of oil per day from the previous plan of 432,000 bpd over three months to September. 

The stock market surge also pulled down the yield on 10-year Treasury notes to 2.917%. 

Seasonally adjusted initial jobless claims at the end of last week fell to 200,000, a decline of 11,000 from the upwardly revised previous week's data, the Labor Department moted in a report today. 

A private survey conducted by ADP also showed private sector job additions declined to 128,000 in May, the slowest pace of increase in the last two years. 

Investors are also looking ahead to Friday's employment report from the the Bureau of Labor Statistics and economists expect May job additions to be slower than 428,000 in April. Unemployment rate in the month held at 3.6%. 

Economists estimate between 325,000 and 345,000 job additions in May.