Tech stocks rise ahead of Apple and Amazon earnings

The S&P 500 rose more than 2.4% in afternoon trading, while the Dow Jones Industrial Average jumped 619 points, or 1.9%. In the bond market, the yield on the 10-year Treasury rose to 2.875% from 2.817%. Yields and bond prices move in opposite directions. Oil prices jumped, sending energy stocks higher, as government officials in Germany said the country was now ready to stop buying Russian oil. Brent crude, the benchmark, rose 2 percent to $107.04 a barrel.

Traders said the stock market is poised for a rally after the recent sell-off in tech stocks, including a major faint earlier in April after

Netflix

Disappointed earnings investors. With little clarity on how higher interest rates will filter through the broader economy, money managers say trading has been thin and vulnerable to saw moves in both directions.

“Nothing goes in a straight line and nothing goes in a straight line,” said Michael Antonelli, managing director and market strategist at Baird. “You don’t need much to move the stock market when everyone is that pessimistic.”

While Thursday’s gains for Meta and tech stocks more broadly were significant, they paled in comparison to the previous year’s losses. Meta stock is still down more than 40% so far this year, and the S&P 500 tech sector is down about 17% from where it closed in 2021. This month alone, inflation concerns, worries about earnings growth and turmoil abroad have sent stocks plummeting. The S&P 500 is down 7.7% through Wednesday’s close, on track for its worst April since 1970, according to market data group Dow Jones.

Except for the start of the pandemic, volatility in the stock market has not continued at such a high level since the 2008 financial crisis, said John Roe, head of multi-asset funds at Legal & General Investment Management. He added that bond volatility is the highest since the financial crisis.

“I don’t think people have much conviction at all,” he said. “It’s a period of time when the underlying uncertainty is at a particularly high level.”

The US corporate world is in the throes of earnings season, and while profits and losses move individual stocks, analysts and traders say they are more concerned about executives’ duration of earnings calls.

“What I want to hear in earnings reports is not whether I met or exceeded expectations, but what you see going forward,” said Christina Huber, chief global market strategist at Invesco. So far this earnings season, the executive commentary paints a picture that may drag on for companies, she said.

In individual stock moves Thursday,

Twitter

Shares rose 1.9% after the social media company posted higher yield And withdraw financial guidance before its acquisition by

Elon Musk.

Southwest Airlines

It rose 0.7% on expectations that the company will be profitable for the rest of the year.

Larva

Shares fell 2.8 percent after the leading industrial company said margins fell in the first quarter.

McDonald‘s

He said earnings were higher than analysts had expected, sending shares up 3.4%.

On the economic front, data showed that the US economy contracted at an annual rate of 1.4% in the first quarter The first contraction since the epidemic. Although the rate of decline is worrying, some analysts said they do not expect a recession in light of the fundamental data. The main driver of the decline was the widening of the trade deficit, which means that the US imported significantly more than it exports. Consumer spending also rose during this period, at a slight acceleration from the end of last year.

The data could also play a role in the Federal Reserve’s decision on whether and how much to raise interest rates at its next meeting, scheduled for next week.

Investors will get a glimpse of how decades of high inflation – and the Fed’s response – will affect consumer sentiment when Apple and Amazon report quarterly results after the closing bell.

Overseas markets rebounded. The Stoxx Europe 600 Index is up 0.6% on strong earnings reports.

After that, Chinese markets regained strength stumble in fears Lockdowns in major cities would slow growth in the world’s second largest economy. The Shanghai Composite Index is up 0.6%. Hong Kong’s Hang Seng Index rose 1.7%.

Nikkei 225 index rose 1.7% after

Bank of Japan

boost her Commitment to low interest rates Despite the high rates of inflation. The central bank said it will buy Japanese 10-year government bonds at a yield of 0.25% every business day to ensure that the yield does not exceed that level.

Commitment to easy monetary policy contrasts with the Fed’s stance, and has led to the yen falling against the dollar. The Japanese currency fell to about 130.65 yen to the dollar, the weakest level since 2002. The offshore yuan fell about 0.9%, as one dollar bought about 6.64 yuan.

The WSJ dollar index rose 0.8% to 95.94, close to its highest since March 2020, when the early spread of Covid-19 caused pressure in global markets.

In commodities, European natural gas markets calmed after prices surged when Russia jumped stop supplies For two EU members Wednesday. Gas futures prices fell 7.7% to 99.15 euros, the equivalent of $103.96 per hour.

Write to Joe Wallace at [email protected] and Quentin Webb at [email protected]