U.S. stocks surged to record highs on Friday, propelled by robust earnings reports and a stellar January employment report, boosting confidence in the economy while dampening expectations for imminent Federal Reserve rate cuts.
The S&P 500 and Nasdaq Composite indices soared over 1%, fueled by solid quarterly results from Meta Platforms and Amazon.com, while the Dow Jones Industrial Average posted more modest gains.
Investors welcomed the news of 353,000 jobs added in January, surpassing analysts’ estimates, alongside unexpected wage growth reported by the Labor Department. These indicators of economic strength tempered expectations for near-term Fed rate cuts, with Chair Jerome Powell signaling a delay in any such action.
Market sentiment was buoyed by a streak of positive earnings surprises, with 80% of S&P 500 companies reporting above Wall Street expectations for the fourth quarter. Meta Platforms saw a remarkable surge of 20.3% to a record high following the announcement of its first dividend, while Amazon.com jumped 7.9% after reporting robust revenue growth driven by new generative artificial intelligence features.
Regional bank shares stabilized after recent sell-offs, with New York Community Bancorp rebounding 5.0% and the KBW Regional Banking index advancing 0.2%. Additionally, Cigna rose 5.4% after raising its annual profit forecast.
However, not all companies experienced positive outcomes, as Microchip Technology dropped 1.6% due to a disappointing sales forecast, and Skechers U.S.A. provided a downbeat outlook, leading to a 10.3% decline in its shares.
After surpassing analyst estimates, oil giant Chevron Corp gained 2.9%, contributing to the overall market rally. Among S&P 500 sector indexes, communication services and consumer discretionary sectors led the gains, rising 4.69% and 2.49%, respectively. Despite the bullish sentiment, declining stocks slightly outnumbered rising within the S&P 500, reflecting mixed market dynamics.
The day’s trading session witnessed a surge in market optimism driven by strong earnings performances and positive economic data, signaling resilience in the face of uncertainties and setting a positive tone for the weeks ahead.
