Tech stocks lead the market higher as Treasury yields stabilise

Stocks rallied Friday, recovering the ground lost in the previous session, as Treasury yields stabilised.

It was a reversal from Thursday’s trading in which the rate on the 10-year jumped more than 10 basis points. The spike in yields followed a dismal Treasury Department bond auction and comments from Federal Reserve Chair Jerome Powell that suggested more intervention may be needed to quell inflation.

The Dow Jones Industrial Average advanced 391.16 points, or 1.15 per cent to close at 34,283.10. The S&P 500 climbed 1.56 per cent to finish the session at 4,415.24. The Nasdaq Composite added 2.05 per cent to 13,798.11, notching its best day since May.

All 11 sectors of the S&P 500 were positive Friday, but tech outperformed, rising 2.6 per cent. Microsoft leapt to all-time highs during the session and ended the day higher by 2.5 per cent. Apple, Meta, Tesla and Netflix jumped more than 2 per cent each, while Alphabet gained 1.8 per cent.

Friday’s surge was also enough to lift the three major averages for a second consecutive week of gains. The S&P 500 advanced 1.3 per cent, while the Dow added about 0.7 per cent. The Nasdaq was the outperformer, rising roughly 2.4 per cent on the week.

Oil settled slightly higher on Friday but was still down 4 per cent for the week after a sell-off on concerns that the global economy is on the verge of a slowdown that will hit demand.markets began to worry that troubling economic data out of Europe and China signaled a global slowdown is on the horizon.

Brent crude contracts for January rose $1.42, or 1.77 per cent, to settle at $81.43 a barrel, while West Texas Intermediate gained $1.43, or 1.89 per cent, to settle at $77.71 a barrel.
In other news, it will be a busy week ahead with several key economic indicators due. The US monthly consumer price data is due out on Tuesday and will provide further guidance on the state of the US economy and the likelihood of a further rate rise from the Federal Reserve.

Monthly US producer price index figures will follow on Thursday and CPI data from the UK will be released on Wednesday.

Also on Wednesday, China’s retail sales and industrial production figures will be released.

To finish the week the US unemployment claims data will be released on Friday morning.

Futures

The SPI futures are pointing to a 0.3 per cent gain.

Currency

One Australian dollar at 8:10 AM was buying 63.59 US cents.

Commodities

Gold lost 1.63 per cent. Silver fell 2.72 per cent. Copper lost 1.47 per cent. Oil gained 1.89 per cent.

Figures around the globe

European markets closed lower. London’s FTSE fell 1.28 per cent, Frankfurt lost 0.77 per cent, and Paris closed 0.96 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei fell 0.24 per cent, Hong Kong’s Hang Seng dropped 1.76 per cent while China’s Shanghai Composite closed 0.47 per cent lower.

On Friday, the Australian share market closed 0.55 per cent lower at 6976.

Ex-dividends
Macquarie Group (ASX:MQG) is paying 255 cents 40 per cent franked

Dividends payable
Harvey Norman Holdings (ASX:HVN)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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