The tech-heavy Nasdaq led Wall Street’s main indices up more than 2% on Wednesday, as upbeat quarterly reports from Microsoft and Alphabet lifted sentiment ahead of a major US interest rate decision later in the day.
Investors were on the edge after warnings of gains from top US retailer Walmart, stoked fears of a broader slowdown in spending as higher inflation raised costs for consumers. In the previous session, all three indices closed down sharply.
Microsoft Corp climbed 4.8% after forecasting double-digit growth in revenue this fiscal year on demand for cloud computing services.
Alphabet Inc added 5.1% as better-than-expected sales in Google search ads came after social media firm Snap Inc warned last week that fears of a sharp ad market slump were relieved.
“The positive response from the latest quarter numbers has been incredibly difficult given the negative market sentiment surrounding the broader technology,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdowne.
The S&P 500 Communications Services Index rose 3.1%, rising for the first time in five days and led by sectoral gains. Tech stocks rose 2.8%.
The results gave rise to high-growth stocks.
Meta Platforms Inc added 3% ahead of its quarterly report after the market close, while shares of Apple Inc. rose 1.75% and Amazon.com Inc. up 3.1% ahead of its results on Thursday.
Megacap growth stocks have tumbled this year as the Federal Reserve has aggressively raised interest rates to combat decades of high inflation. The future cash flows on which the valuations of these companies rest, are heavily discounted when rates rise.
Investors widely expect the US central bank to raise interest rates by 75 basis points later on Wednesday, with the focus likely to focus on how deep the signs of an economic slowdown have lodged with their policymakers. Is.
According to the CME Group’s FedWatch tool, money market traders were even giving a one in four chance the Fed would surprise the market with a massive 1-percentage-point increase.
The decision is due at 2:00 p.m. ET (1800 GMT) and a half-hour later Fed Chairman Jerome Powell’s news conference should detail how the central bank views recent economic data and at least hint at its next steps. gives.
“If he (Powell) gets some sort of indication that inflation is under control, that’s a signal to the market that his (Fed) move is working and 50 basis points are in the cards for the next meeting, said Robert Pavlik, senior portfolio manager at Dakota Wealth Management.
At 09:49 am, the Dow Jones Industrial Average was up 147.29 points, or 0.46%, at 31,908.83, the S&P 500 was up 46.33 points, or 1.18%, at 3,967.38, and the Nasdaq Composite was up 250.93 points, or 2.17%. , at 11,813.50.
Shares of The Boeing Company gained 2.8% this year after sticking to its goal of generating free cash flow.
PayPal Holdings Inc jumped 8.2% after a report said activist investor Elliott Investment Management was building a stake in the fintech giant.
T-Mobile US Inc added 3.5% after raising its customer growth forecast for the second time this year and exceeding quarterly profit expectations.
Advancing issues declined from a 2.69-to-1 ratio on the NYSE and a 2.16-to-1 ratio on the Nasdaq.
The S&P index posted a new 52-week high and 29 new lows, while the Nasdaq posted 27 new highs and 38 new lows.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
catch all business News, market news, today’s fresh news events and breaking news Updates on Live Mint. download mint news app To get daily market updates.