U.S. stocks rose Friday morning, with the S&P 500 on track to end a three-week losing streak as investors digested the latest assertions from Federal Reserve officials that they remained committed to lowering the stock market. ‘inflation.
The S&P 500 rose about 1%, setting the index up for a straight day of gains and its first weekly advance since late May. The Dow rose more than 250 points, or 0.9%, while the Nasdaq rose nearly 1% before the opening bell. Major averages held on to their gains even after a closely watched print on consumer sentiment was revised to a new record low as Americans continued to battle high inflation.
Major US averages traded choppy this week but eventually trended higher as investors priced in the continued economic impact of the Fed’s actions to lower prices. Fed Chairman Jerome Powell made his most explicit acknowledgment this week that a recession was “definitely a possibility” – although not the “expected outcome” – as the central bank raised policy further. interest rate this year.
“Really, investors want the chairman to understand that inflation is a big issue and is best dealt with sooner in the long term,” said Diane Jaffee, group chief executive and group senior portfolio manager. TCW, at Yahoo Finance Live on Thursday. “So I think investors are confident the Fed is going to do whatever it takes.”
Yet Powell’s nod to current recession risks was followed by heightened warning signals from a series of Wall Street firms that recently raised their own forecasts for the likelihood of a near-term recession. . Powell’s assertion that the Fed’s commitment to lower inflation was “unconditional” also suggested that the central bank would not stop raising rates at the first signs of an economic slowdown.
Defensive stocks seen as more resilient in downturns advanced this week, with the healthcare and utilities sectors among the biggest outperformers in the S&P 500. Cyclical sectors lagged, energy and financials materials each heading for weekly losses. West Texas Intermediate crude oil futures hovered around $106 a barrel and headed for a third straight weekly loss, as well as its first monthly loss since November.
Treasury yields rose across the curve to stabilize after renewed recession concerns also sent yields tumbling earlier this week. The benchmark 10-year rate rose back above 3.10%, after reaching 3.31% at the start of the week.
FedEx (FDX) Shares rose after the shipping giant released full-year guidance that beat Wall Street estimates, while meeting fiscal fourth-quarter earnings expectations. FedEx expects full-year adjusted earnings per share to be between $22.50 and $24.50, versus $22.36 seen by analysts, according to Bloomberg. FedEx Chief Customer Officer Brie Carere noted during the company’s earnings call Thursday that they expect business-to-consumer shipping volumes will come under some pressure next year. , as consumer spending continues to “switch to services from goods”.
Zendesk (ZEN) Shares soared after the Wall Street Journal reported that the software company was close to reaching an agreement with a group of takeover companies, including Hellman & Friedman and Permira. The private equity takeover could be confirmed in the coming days if talks progress, according to the Wall Street Journal.
CarMax (KMX) Shares rose after the used-vehicle retailer reported first-quarter results that beat expectations. Earnings per share of $1.56 on revenue of $9.31 billion beat estimates for earnings of $1.51 per share and revenue of 8, according to Bloomberg data. $.99 billion. However, total retail used-vehicle unit sales were down 11% from a year ago, which CarMax says is due to “overlapping stimulus payments paid out over the period.” the previous year; widespread inflationary pressures, including challenges to vehicle affordability; and declining consumer confidence.”
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.
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