4:15pm: Tech stocks lead broad rally
The Dow closed Thursday up 429 points, 1.3%, at 34,408, the Nasdaq Composite gained 156 points, 1.2%, to 13,783 and the S&P 500 improved 53 points, 1.2%, to 4,426. The small-cap Russell 2000 index rose 13 points, 0.7%, to 1,887.
The S&P and Nasdaq climbed for the sixth-straight day to their highest intraday levels since April 2022 as investors relished the Federal Reserve's decision to pause its interest rate tightening cycle.
Unsurprisingly, tech stocks helped lead the way, with Microsoft, Oracle and Alibaba all up more than 3%.
12:05pm: Stocks turn positive on hopes rate-raising cycle is nearly over
US stocks were higher in noon trading on investor hopes that the Federal Reserve was nearly done raising rates.
At midday, the Dow rose 356 points to 34,335, while the S&P 500 added 36 points at 4,409 and the tech-heavy Nasdaq gained 94 points to 13,721.
“The key question for the market [now] is, can value and cyclical stocks catch up to growth and tech?” Certuity co-chief investment officer Dylan Kremer said.
Notable movers included shares of Target Corp, which advanced 3% after the retailer raised its quarterly dividend by 1.9% to $1.10 per share from $1.08.
9:40am: Mixed bag of economic data
US stocks were mixed at the open on Thursday as investors digested the Fed’s June interest rate hike pause and chairman Powell’s comments.
Just after the opening bell, the Nasdaq had shed 53 points or 0.4% at 12,576 points, the S&P 500 was down 7 points or 0.2% at 4,366 points, and the Dow Jones was flat at 33,997 points.
“Stocks are selling off on the back of a more hawkish Fed outlook, and non-yielding gold has dropped to a three-month low,” said FOREX.com market analyst Fiona Cincotta.
On the data front it has been a mixed bag, Cincotta noted.
“On the one hand, retail sales unexpectedly increased by 0.3%, beating forecasts of a 0.1% decline in May. The data suggests consumers are still spending thanks to the solid US jobs market,” she said.
“Meanwhile, jobless claims rose more than expected to 262,000 ahead of the 249,000 analysts had pencilled in.”
On the unemployment data, Validus Risk Management head of global capital markets Ryan Brandham commented: “This is the second consecutive elevated number following last week’s number, which was the highest in well over a year. If US labour markets are finally starting to soften, this lends some credibility to the Fed’s decision to pause yesterday.”
7:50am: Fed's "hawkish hold"
US stocks are expected to open lower on Thursday after the Federal Reserve hit pause on interest rate hikes in June but indicated there may be up to two more increases in lending rates this year as it battles to get inflation back into its target range.
Futures for the Dow Jones Industrial Average (DJIA) fell 0.2% in pre-market trading, while those for the broader S&P 500 index declined 0.4% and contracts for the Nasdaq-100 were 0.8% lower.
The main US indexes initially tumbled on Wednesday when the Fed made its rates announcement but comments from chair Jerome Powell helped stem the selloff when he told a post-meeting news conference “the conditions that we need to see in place to get inflation down are coming into place.”
The DJIA retraced some of its losses to close 0.7% down at 33,979, the S&P 500 added 0.1% to 4,373 and the Nasdaq Composite rose 0.4% to 13,626. The small-cap Russell 2000 index slid 1.3% to 1,871.
“Mixed messages from the Federal Reserve provoked a mixed market reaction, while any thoughts of rate cuts this year finally evaporated,” commented Richard Hunter, head of markets at interactive investor.
“Although rates were unchanged for the first time in many months, the Fed surprised investors with a suggestion that two further rises could be in the pipeline this year, depending on ongoing economic data. The accompanying comments led investors to dub the decision as a 'hawkish hold' as Chair Powell gave an overview of the latest thinking," he added.
Today, market participants will keep an eye on further US data for indications of the duration of the Fed's current “pause,” said TickMill Group’s Patrick Munnelly.
“May's retail sales figures will be of particular interest, as April's numbers surprised on the upside, suggesting that consumer activity remains relatively strong.
“Although May is expected to show some weakness, core sales are anticipated to remain solid. Jobless claims will also be monitored, as they provide insights into employment market conditions and any potential easing of pressures in that area," he noted.
Contact the author at stephen.gunnion@proactiveinvestors.com