The Dow Jones gained 1.17%, the Nasdaq index took 1.97% and the broader S&P 500 index, 1.61%.
For Jack Ablin, of Cresset Capital, the movement was impelled on Thursday by the rebound of the S&P 500 on a major technical threshold, namely the average of the last 200 trading days, before continuing on Friday.
“It shows that the market is technically sound,” explained Cresset’s chief investment officer.
After several turbulent weeks, which saw a recalibration of New York market expectations as to the trajectory of the Federal Reserve (Fed), operators believe they have digested this new scenario.
They were reassured by the declarations, Thursday, of the president of the antenna of the Fed in Atlanta, Raphael Bostic, evoking a pause of the monetary tightening this summer.
“The feeling that we are coming (to the peak of the monetary cycle) is gaining ground,” according to Jack Ablin. “It may not be May, or even June, but within a few months the Fed will wrap up its tightening program.”
An analysis that resulted in a clear relaxation of bond rates. The yield on 10-year US government bonds thus fell to 3.95%, against 4.05% the day before closing.
Wall Street was also encouraged by the indicator of the day, the ISM index, which showed that activity in the services sector had maintained, in February, a rate roughly equivalent to that of January (55.1% against 55.2).
The ISM survey also revealed a slight deceleration in the prices paid by purchasing managers for this same sector, to 65.6% against 67.8 in January, offering rare good news on the front of the inflation.
The easing in rates has been a blessing for technology stocks, which are very dependent on the cost of money to finance their accelerated growth.
Apple (+3.51%), Tesla (+3.61%), Amazon (+3.01%) or Meta (+6.14%) were at the forefront.
The semiconductor manufacturer Broadcom (+5.70%) also shone thanks to results that exceeded expectations. The group considers itself well positioned to take advantage of the acceleration of artificial intelligence (AI), which requires ever faster chips.
C3 AI, one of the few Wall Street-listed companies entirely dedicated to AI, soared above the market (+33.65%) thanks to better-than-expected forecasts for the current quarter. Chief executive Thomas Siebel said there are “carrying winds” linked to the current interest in artificial intelligence.
Bank stocks were also on a roll, thanks to the lull in short-term bond rates, on which they depend to finance their activities. Goldman Sachs (+2.29%), Bank of America (+2.00%) or JPMorgan Chase (+1.84%) all advanced.
The Victoria’s Secret lingerie brand (+5.22%) benefited from results that exceeded expectations. Investors nonetheless found the first-quarter earnings forecast disappointing and, for GlobalData analyst Neil Saunders, Victoria’s Secret “is a brand in decline.”
The Costco chain of semi-wholesale stores dropped 2.15%, after reporting lower-than-expected sales and cautious comments from chief executive Craig Jelinek.
Computer maker Dell (-0.95%) suffered from forecasts below analysts’ projections, despite better than expected quarterly results.