Wall Street rises on Meta boost and soft landing hopes.

Wall Street rises on Meta boost and soft landing hopes.

Wall Street Soars on the Federal Reserve’s Optimistic Outlook

Wall Street’s main indexes experienced a surge on Thursday, fueled by hopes that the Federal Reserve’s tightening of monetary policy was coming to an end. This optimistic sentiment was further supported by a report from the Commerce Department, which revealed that the world’s largest economy had grown faster than expected in the latest quarter. The strong performance of tech giants like Meta Platforms and Alphabet also contributed to the positive market sentiments.

Meta Platforms, the parent company of Facebook, saw a significant boost of 8.2% in its stock price after reporting a jump in second-quarter advertising revenue that exceeded Wall Street’s expectations. This follows Alphabet’s impressive results earlier in the week, indicating that both consumers and advertisers remain resilient despite broader economic concerns.

The outperformance of mega-cap growth stocks, particularly in the technology sector, has been a key driver of the Nasdaq’s success this year. However, the Dow Jones Industrial Average is now catching up, poised for its 14th straight day of gains, the longest winning streak since at least 1920. This shift reflects investors’ growing confidence in sectors beyond technology.

The Federal Reserve’s decision to raise interest rates by 25 basis points, as anticipated, did not dampen market spirits. In fact, traders are now only anticipating a 20% chance of a surprise quarter-point increase in September. Federal Reserve Chair Jerome Powell’s announcement that the Fed staff no longer forecasts a U.S. recession added to the positive sentiment.

“A better-than-expected second-quarter GDP print is supportive of the soft landing scenario,” stated Carol Schleif, Chief Investment Officer at BMO Family Office. She further emphasized that despite multiple rate hikes over the past year, the Fed has not caused a recession.

• Comcast surpasses revenue predictions with theme parks and studios.
• McDonald’s exceeds sales and profit expectations with afforda...
• Harley-Davidson profit skids, production halt impacts outlook.

As of 9:44 a.m. ET, the Dow Jones Industrial Average had gained 84.43 points (0.24%), reaching 35,604.55. The S&P 500 rose by 38.60 points (0.85%), reaching 4,605.35, while the Nasdaq Composite experienced a significant increase of 224.09 points (1.59%) to reach 14,351.37.

While the overall market sentiment appeared positive, not all stocks saw gains. EBay, for instance, forecasted third-quarter profit below market expectations due to increased spending to strengthen various categories within their e-commerce platform. Consequently, their shares declined by 7%.

However, chipmakers such as Nvidia, Micron, and Marvell Technology experienced a boost of nearly 3% each after Lam Research projected an upbeat quarterly sales figure. Lam Research’s announcement led to a 9.6% increase in their own stock price.

Universal banks, including Citigroup, Wells Fargo, and Bank of America, had mixed performance as investors awaited the unveiling of new regulations that could significantly raise capital requirements for lenders.

In the airlines industry, Southwest Airlines saw a decline of 7.7% in their second-quarter profit, resulting in a decrease in their stock price. On the other hand, Royal Caribbean registered a surge of 7.6% after raising its annual profit forecast, indicating positive growth in the cruise sector.

Meanwhile, in Europe, the European Central Bank announced its ninth consecutive interest rate hike while keeping the door open to further tightening.

Overall, advancing stocks outnumbered decliners by a ratio of 1.89-to-1 on the NYSE and 1.78-to-1 on the Nasdaq. The S&P index recorded 35 new 52-week highs and one new low, while the Nasdaq saw 65 new highs and 28 new lows.

In conclusion, Wall Street’s positive surge reflects investors’ confidence in the Federal Reserve’s optimistic outlook and the resilience of the world’s largest economy. The strong performances of tech giants and the growth witnessed in various sectors beyond technology have contributed to this market momentum. Despite some stocks experiencing setbacks, the overall market sentiment remains positive, with advancing stocks outnumbering decliners.

• .N
• .N/P
• AMERS
• BLR
• CEN
• CHIP
• CHIP1
• CMPNY
• ECI
• ECO
• ECON
• GDP
• INT
• ITSE
• ITSE08
• MCE
• MKTREP
• NAMER
• NETSV
• NEWS1
• PLCY
• PUBL
• REP
• SEMI
• SOCMED
• STX
• SWIT
• tech
• TECH08
• TEEQ
• TEEQ08
• TMT
• TOPCMB
• TOPNWS
• US