Market Updates
Tech Stock Rally After Emboldened Investors Bet On Rate Hike Pause
Barry Adams
23 Mar, 2023
New York City
Tech stocks led the gainers on Wall Street after traders bet the Federal Reserve is done raising rates for now.
Microsoft, Apple, Meta, Alphabet, Nvidia, Tesla and Intel advanced between 2% and 5% following a rally in the tech sector.
The rate-pause or slower-hike debate raged on Wall Street after the Federal Reserve increased interest rate for the ninth time in a row over the last 12 months.
Despite the multiple rate hikes, inflation is not cooling fast enough for policymakers as tight labor market conditions support higher wages.
However, inflation pressures are mostly rooted in price actions by corporations and services providers and higher food, energy and housing prices are contributing to 4-decade high inflation.
U.S. Treasury yields edged slightly lower but short term bond rates stayed above the medium and long term bond yields, suggesting tighter lending conditions for households and corporations.
Regional banks rebounded on the hopes that the Fed may pause after raising rates one last time in May.
Indexes & Yields
The S&P 500 index increased 1.1% to 3,980.31 and the Nasdaq Composite index advanced 1.8% to 11,873.44.
The yield on 2-year Treasury notes inched 6 basis points lower to 3.91%, 10-year Treasury notes edged down 3 basis points to 3.46% and 30-year Treasury bonds rose 2 basis points to 3.72%.
Crude oil increased 20 cents to $71.10 a barrel and natural gas edged up 2 cents to $2.20 a thermal unit.
U.S. Stock Movers
Carvana Co increased 10.5% to $9.32 on top of 15% increase in the previous session after the company offered to exchange secured notes to unsecured note holders of as much as $1 billion at a 2% premium to the prevailing market price.
Coinbase Global Inc dropped 11.9% to $67.95 after the cryptocurrency trading app operator received Wells notice from the Securities and Exchange Commission.
The potential charges are related to Coinbase spot trading, Coinbase Wallet and Coinbase Prime, according to a company's filing with the regulatory agency.
Chewy Inc declined 9.1% to $34.29 after the online pet food store posted better-than-quarterly sales and earnings in the fourth quarter.
The company also reported a slight decline in active users to 20.4 million in the fourth quarter from 20.5 million in the previous quarter.
Net sales in the fourth quarter increased 13.4% to $2.71 billion and swung to a net income of $56.1 million from a loss of $63.6 million and diluted earnings per share was 1 cent compared to a loss of 15 cents a year ago.
Annual Returns
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Earnings
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