02/01/2024
US stocks opened higher on Thursday after the worst sell-off in months on Wall Street, as investors recalibrated their timeline for rate cuts from the Federal Reserve and prepared for a heavy-hitting round of megacap tech earnings.
The benchmark S&P 500 (^GSPC) rose 0.4%, while the blue-chip Dow Jones Industrial Average (^DJI) gained 0.2%. The tech-heavy Nasdaq Composite (^IXIC), which suffered a more than 2% decline Wednesday, opened higher by about 0.6%.
The financial world is moving fast and furious this week, but the Fed remained the focus Thursday morning. Fed Chair Jerome Powell, while cementing a pivot in the central bank's rate plans, gave investors looking for quick interest rate cuts a wake-up call. He hinted that he views it unlikely that the bank would begin to cut rates at the Fed's next meeting in March, something that was viewed largely as a toss-up earlier this week.
Indeed, according to the CME FedWatch tool, investors were pricing in about a two-thirds chance of another hold at the March meeting, while almost all bets are on a small — or larger — cut come May.
Meanwhile, members of the "Magnificent Seven" will take center stage after the closing bell, with Apple (AAPL), Amazon (AMZN), and Meta (META) set to report earnings. Tuesday's first batch of Big Tech results from Microsoft (MSFT) and Alphabet (GOOGL, GOOG) failed to live up to investors' lofty expectations, helping send those stocks lower.
Lest we forget, the economic world has one more narrative-fueling data point waiting this week. Investors will get a snapshot of January's job market with Friday's nonfarm payrolls report.
