The S&P 500 and Nasdaq Composite climbed on Friday to finish their best week of the year, as continued strength in earnings reports extended the tech-led rebound from the January rout.
The broad market index added 0.4%, led by a jump in Amazon shares. The Nasdaq Composite rose 1.1% and was on track to finish the week 2% higher. The Dow Jones Industrial Average fell 67 points, or 0.2%. The Dow and S&P were on track to end the week up more than 1%.
Amazon jumped 12%, while Snap rocketed up around 49% the day after reporting earnings. Pinterest rose about 5%.
Friday’s moves came as traders weighed a much stronger-than-expected jobs report and its potential impact on U.S. monetary policy going forward. The 10-year Treasury yield jumped above 1.9%, its highest level since January 2020, after the January jobs report showed a 467,000 gain in payrolls. Economists polled by Dow Jones had expected a minor gain of 150,000, and some economists predicted a large decrease. Economists had cautioned before the report it could be noisy because of an omicron wave hitting while the survey was taking place.
The 10-year yield has jumped from 1.51% at the end 2021 as the Fed pivoted to more aggressively fight inflation, signaling it would slow down its bond buying and raise rates several times this year. Higher rates have weighed on stocks, especially tech shares with high valuations. The S&P 500 is down 6% this year.
Friday’s moves come the day after a tech rout spurred by a disappointing earnings report from Facebook parent Meta. The company’s weak results sent the mega-cap tech stock lower Thursday and weighed on equity markets.
On Thursday, the Nasdaq Composite, which is tilted towards tech shares, fell 3.7% for its worst daily performance since September 2020. The S&P 500 had its worst day in nearly a year, sliding 2.4%. The Dow Jones Industrial Average fell 518.17 points.
“The sharp drop in FB market cap today and the accompanying drag on the S&P500 index is … a stark reminder of the high concentration of mega-cap Tech stocks in the S&P 500 — and the vulnerabilities that such concentration brings,” Goldman Sachs’ Chris Hussey said in a note Thursday.
Meanwhile, U.S. oil prices topped $90 per barrel for the first time since 2014, heightening inflation concerns.
The S&P 500 was slightly higher Friday as investors digested a slew of tech earnings and January jobs data.