Markets experienced a strong rally on Thursday, with the S&P 500 closing higher by 0.9% and the Nasdaq Composite adding 1.5%. Companies like Alphabet, Amazon, Microsoft, Netflix, and Nvidia all saw gains throughout the day. Apple also contributed to the positive sentiment, announcing a $110 billion stock buyback program after reporting declining revenues for the fifth time in six quarters due to sluggish iPhone sales. The company’s stock rose over 6% in after-hours trading.
Federal Reserve Chairman Powell’s statements hinting at a possible rate cut later in the year further fueled market optimism. This came after the release of an employment report that fell short of expectations, with only 175 thousand new jobs created and the unemployment rate rising to 3.9%. Average hourly earnings also came in weaker than anticipated. The data adds to the case for a rate cut in September, with a better than 60% chance currently predicted by the CME.
Apart from economic reports, investors are also navigating through a wave of earnings announcements. Coinbase reported better than expected earnings, marking its first profit in two years. The company is closely linked to bitcoin and had previously benefitted from the crypto market rally. However, its stock fell by 2% in after-hours trading. Paramount Global saw its shares rise by 13% after Sony Pictures and Apollo Global Management submitted a $26 billion all-cash offer for the company. Peloton, on the other hand, faced a 2.8% decline following news of CEO Barry McCarthy stepping down and further job cuts.
Commodities like oil, gold, and silver have been on a downward trend recently, with crude oil prices falling 9% since early April. This drop, alongside the latest employment report, should help alleviate concerns about rising inflation. Looking ahead, market futures are up significantly in premarket activity, indicating a strong opening. With most major earnings releases already behind us and a lighter economic calendar next week, markets are expected to remain robust. It is advised to stick to investing plans and long-term objectives amidst the positive market conditions.
Overall, the market saw a significant rally on Thursday, fueled by positive earnings releases from tech giants like Apple and upbeat news from the Federal Reserve regarding a potential rate cut. With a mix of economic data and corporate earnings shaping market sentiment, investors are encouraged to stay informed and maintain a long-term investment strategy. The upcoming week is expected to continue the positive trend, with market futures pointing towards a strong opening and a lighter economic calendar. Watching commodity prices and ongoing developments in the market will be crucial in making informed investment decisions.
