It was a rough week for the stock market, so investors were eager to see how some big tech companies did in their earnings reports on Thursday night.
It was a good day for the contracts on the S&P 500, which went up. AAPL, a component stock of the Dow, rose in late trading after the company reported record quarterly sales and a profit that was better than expected. Shares of Robinhood (HOOD) also fell after the trading platform missed on quarterly revenue, saw a bigger-than-expected drop in users, and didn’t give a good forecast.
Thursday’s close put the S&P 500 on track to lose 1.3% for the week, according to how it looked at the end of the week. This is what happened on Thursday: New data showed that the US GDP rose more than expected in the fourth quarter, but it didn’t help the stock market. Weekly jobless claims also went down. This week, both the Dow and the Nasdaq have fallen. The volatility of the markets rose as traders thought about the effects of the Federal Reserve’s more hawkish monetary policy on the markets.
That’s what Scott Crowe, the chief investment strategist at CenterSquare Investment Management, told Editorials99 Finance Live on Thursday. “I think people were surprised by how big this move by the Fed was,” he said. “In the past, they talked about inflation as “temporary,” but now they want to keep it from getting out of hand. You can see why the market isn’t happy with itself right now as it tries to process this big change in the way it looks at things.”
This week, Federal Reserve Chair Jerome Powell made it very clear that interest rates would rise above their current low levels in March, which would be a big change. There were still questions about how quickly the Fed will raise interest rates and how quickly the Fed will start taking down its nearly $9 trillion balance sheet and tightening the economy.
“Everything the Fed is doing now, we think, has already been thought about for a few weeks. People have been losing money in the market because of that “It was Morgan Stanley’s managing director, Kathy Entwistle, who said this to Editorials99 Finance Live on Thursday. “Will we slide a little more? What’s going on?”
“We’re looking at companies and their earnings to see if we’re going to have a little more of a drop in the market or not,” she said. “And that’s based on what they can do in the future, what their chances are, and so on. Then, we’ve been hearing a lot about inflation as well. if you think about a 7% inflation rate, that’s a pretty big deal “In this case, it’s important.
There were a lot of people who bought things for their own use back then that kept the market from moving, said Entwistle. “In the last few days, their moods have changed a little bit. They’re not as positive about where we are right now. Think about all of these things. There is a good chance that quality is going to do better than growth again, though.”
6:15 p.m. ET Thursday: Stock futures jump after Apple earnings
Here’s where futures began trading Thursday evening:
- S&P 500 futures (ES=F): +30 points (+0.69%), to 4,347.75
- Dow futures (YM=F): +169 points (+0.5%), to 34,212.00
- Nasdaq futures (NQ=F): +169 points (+1.21%) to 14,155.75