Tech Stocks Rebound As Magnificent 7 Roar On Strong Earnings, Energy Giants Tumble: What’s Driving Markets Friday?
Strong earnings reports from Alphabet Inc. (NASDAQ:GOOGL) and Microsoft Corp. (NASDAQ:MSFT) have restored positive sentiment in the market, sweeping away fears of increasing risks of stagflation that had emerged from Thursday’s data.
Although the latest PCE inflation report signaled higher-than-expected annual readings, they failed to meaningfully impact on already low expectations for Fed rate cuts. Rather, investors opted to focus on positive signals stemming from corporate earnings.
The S&P 500 gained over 1%, and is up by 2.8% this week, on track for its best week since late October 2023. The Nasdaq 100 outperformed with a 1.8% increase, pushing the weekly performance to over 4%, also eyeing its best week in seven months.
A significant amount of support for the broader market came from the Magnificent Seven, with the group gaining a combined market cap of $400 billion in a day, more than offsetting losses seen on Thursday. The Roundhill Magnificent Seven ETF (NYSE:MAGS) rallied 3.5%.
Small caps also saw robust gains, with the iShares Russell 2000 ETF (NYSE:IWM) up 1%. The big underperformer was the energy sector, as its two major …
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