The Dow Jones Industrial Average hit its best three-week stretch since November 2020, supported by expectations for a slower rate of interest rate growth and the latest corporate earnings.
Major indexes started Friday lower, then rose, and closed the session close to daily highs. The Dow added 748.97 points, or 2.5%, to 31082.56. this The S&P 500 added 86.97 points, or 2.4%, to 3752.75. The tech-focused Nasdaq Composite gained 244.87 points, or 2.3%, to 10859.72.
All three major indices ended with at least 4.7% weekly gains, after a long period of volatility marked by huge fluctuations for equities and bonds around the world. The Dow and S&P 500 finished their best week since June, while the Nasdaq closed its best week since July.
Major indexes rose and Treasury yields halted their rise, as The Wall Street Journal reported that Federal Reserve officials were ready to raise interest rates by 0.75 percentage points at their November meeting. 1-2 meetings but we are ready to discuss switch to a smaller increment in December.
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Concerns over the pace of rate hikes and whether they will help push the US into recession have caused a sharp sell-off throughout the year.
“I think we’re at the pinnacle of the Fed’s hawk,” said Christian Hoffmann, portfolio manager at Thornburg Investment Management, who oversees bonds.
The yield on the 10-year Treasury bond fell on Friday, but climbed for the 12th week in a row to record its biggest gain since 1987. The yield of the benchmark bond closed the week with 4.212%, close to the highs of the past. ten years.
The yield on the two-year Treasury note, which is typically more sensitive to interest rate expectations, also fell on Friday, closing the week at 4.489%.
Investors are watching earnings closely for clues about how rising rates, a strong dollar and high inflation are affecting corporate profits. Third-quarter results have been a mixed bag so far. US banks helped boost markets earlier this week with better-than-expected results, but cracks are showing elsewhere. So far, net profit margins of S&P 500 companies will fall in the third quarter for the fifth consecutive term.
Snap shares fell $3.03, or 28%, to $7.76 after the company reported further. slowdown in sales growth and signaled that the digital advertising market may remain inactive for a while.
“The reality is that we’re seeing weaker growth, higher inflation, and surprising gains to the downside. It’s a pretty tough combination,” said Luca Paolini, chief strategist at Pictet Asset Management. “This earnings season will still be good. The worry is for the next two, in a way.”
shares From $2.55 or 4.9% to $49.89, After Bloomberg News reported that Biden administration officials were discussing whether the United States should subject some of Elon Musk’s initiatives to national security scrutiny.
Still, the week ended with a few signs that the US economy is stronger than initially feared. A few corporate leaders—from companies JPMorgan Chase IT Delta Airlines-Have expressed confidence consumer strength. And Thursday’s new data showed that, job market still healthy.
In the UK, markets came under pressure on Friday as investors wondered who would win the race to become the country’s next prime minister. Liz Truss’ resignation Thursday.
His election and resignation caused sharp fluctuations in the country’s currency and bonds. The UK’s 10-year gilding yield rose to around 4.05% from 3,860% on Thursday. As prices fall, bond yields rise.
Traders worked on the New York Stock Exchange earlier this week.
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Michael M. Santiago/Getty Images
The FTSE 100 index rose 0.4 percent in the UK. Pan-European Stoxx Europe 600 down 0.6%
Oil prices moved upwards in commodity markets. Brent crude, the international benchmark, gained $1.12, or 1.2% per barrel, to $93.50.
Asian stocks were mixed. China’s Shanghai Composite rose 0.1%, while Hong Kong’s Hang Seng index fell 0.4% and Japan’s Nikkei 225 index lost 0.4%.
Write to Gunjan Banerji at: gunjan.banerji@wsj.com and Chelsey Dulaney chelsey.dulaney@wsj.com
Corrections and Amplifications
Christian Hoffmann is portfolio manager at Thornburg Investment Management. An earlier version of this article incorrectly spelled his last name as Hoffman. (Fixed on Oct. 21)
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