Positive forecasts from Apple Inc and Amazon.com Inc indicated that mega-cap companies have the resilience to survive an economic downturn, with hopes of promoting less aggressive monetary policy.
The two biggest US oil companies, Exxon Mobil and Chevron Corp, also posted record revenue on Friday from rising crude oil and natural gas prices.
The Nasdaq Composite was up 119.52 points, or nearly 1%, at 12,282.11 and the S&P 500 rose 25.97 points, or 0.64%, to 4,098.4. The Dow Jones Industrial Average rose 24.34 points, or 0.07%, to 32,553.97.
US labor costs rose strongly in the second quarter as a tight job market continued to fuel wage growth, which could keep inflation high for some time.
The US Commerce Department said on Friday that consumer spending, which accounts for more than two-thirds of US economic activity, also rose 1.1% last month.
As inflation picks up in major markets and central bankers scramble to raise rates without killing growth, riskier markets such as stocks have reacted positively to any perceived softening on the part of policymakers.
Thursday’s data showed the US economy shrank in the second quarter, with stocks rising as traders’ bet rates would move more slowly. Meanwhile, euro zone numbers on Friday beat expectations, yet fears of a recession are rising as energy inflation continues to warp in Ukraine.
The MSCI World Index was up 0.55%, on course for a nearly 6% monthly gain, its best since November 2020, buoyed by broad gains in European markets, with the STOXX Europe 600 up about 1%.
Despite a positive end to the month for stocks, Mark Heifel, chief investment officer at UBS Global Wealth Management, said investors should proceed with caution.
“In the near term, we think the risk-reward for the broader equity index will be muted. Equities are pricing in a ‘soft landing’, yet the risk of a deep ‘recession’ in economic activity has increased. “
After Beijing dropped references to its full-year GDP growth target after a high-level Communist Party meeting, some of the concern was evident in Asian stock markets overnight.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.66%.
News in the prior session that US GDP shrank 0.9% in the previous quarter, on top of a 1.6% contraction in the prior quarter, initially weighed on US bond yields and the greenback. But both survived on Friday.
Yields on the benchmark 10-year Treasury notes recovered slightly from their overnight lows to trade at 2.693%, while the yield of the two-year note, which usually moves in step with interest-rate expectations, also declined on that day. was 2.918%.
After first flirting with positive territory, the dollar was up 0.37% against a basket of its major peers – on course for a second month of gains.
Futures markets now predict that US interest rates will peak by December this year instead of June 2023, and the Federal Reserve will cut interest rates by about 50 bps next year to support slower growth.
Across commodities, Brent crude futures rose nearly 3%, while US West Texas Intermediate crude added about 3.5% in early gains as concerns about supply shortages ahead of the next meeting of OPEC ministers cast doubts around the economic outlook. removes.
Spot gold was trading flat after hitting a more than three-week high, backed by a softer dollar and bets that the Federal Reserve will pick up the pace of rate hikes. could cool the economy as economic risks deepen.
This story has been published without modification in text from a wire agency feed.
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