A renewed rally in tech megacaps fueled a rebound in stocks as bond yields fell on the eve of the jobs report amid speculation that the Federal Reserve will be able to pause its interest-rate hikes.
(Bloomberg) — A renewed rally in tech megacaps fueled a rebound in stocks as bond yields fell on the eve of the jobs report amid speculation that the Federal Reserve will be able to pause its interest-rate hikes.
After a brief respite in the colossal advance of big tech fueled by the artificial-intelligence frenzy, the cohort is back in full force. Nvidia Corp. climbed 4%, leading gains in the Nasdaq 100. Aside from the obsession for anything AI-related that drove tech giants up 17% in May, the group got a lift after weak factory data spurred a slide in Treasury yields.
“One can rightly ask how many more “Mays” we can have, where US big tech is almost the only place to find outsized positive equity returns anywhere in the world,” said Nicholas Colas, co-founder of DataTrek Research. “The old Keynesian saying that goes, ‘markets can remain irrational longer than you can stay solvent’ feels especially relevant in the current investment environment.”
The tech rebound also pushed C3.ai Inc. off its session lows, with the AI software firm paring a plunge that topped 24% by more than half. The upcoming results from chipmaker Broadcom Inc. are set to be the next indication on whether the industry’s rally has gotten ahead of itself after multiple analysts cited the potential for AI-fueled revenue growth.
After a raft of mixed labor-market readings on Thursday, the monthly jobs report on Friday — which includes government payrolls — will provide further insight into prospects for a Fed pause. Forecasters project the government’s report to show a moderation in the pace of hiring.
Meantime, the US Senate prepared Thursday to take up the debt-limit deal forged by President Joe Biden and House Speaker Kevin McCarthy with some senators threatening to delay the measure as a default deadline nears.
In other corporate news, Macy’s Inc. dropped after cutting its earnings outlook. Salesforce Inc. fell after the software company gave a lackluster forecast for sales. Dollar General Corp. slumped after the discount retailer slashed its annual profit forecast. Nordstrom Inc. gained after the department-store chain’s quarterly revenue and profit came in slightly ahead of estimates.
Some of the main moves in markets:
Stocks
- The S&P 500 rose 0.8% as of 12 p.m. New York time
- The Nasdaq 100 rose 0.9%
- The Dow Jones Industrial Average rose 0.6%
- The Stoxx Europe 600 rose 0.8%
- The MSCI World index rose 1%
Currencies
- The Bloomberg Dollar Spot Index fell 0.6%
- The euro rose 0.6% to $1.0752
- The British pound rose 0.8% to $1.2535
- The Japanese yen rose 0.4% to 138.75 per dollar
Cryptocurrencies
- Bitcoin fell 0.8% to $26,896.78
- Ether fell 0.1% to $1,863.29
Bonds
- The yield on 10-year Treasuries declined four basis points to 3.60%
- Germany’s 10-year yield declined three basis points to 2.25%
- Britain’s 10-year yield declined seven basis points to 4.12%
Commodities
- West Texas Intermediate crude rose 3.8% to $70.67 a barrel
- Gold futures rose 0.9% to $1,999.80 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Emily Graffeo, Vildana Hajric, Peyton Forte and Isabelle Lee.
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