Indicators jump on inflation data. Nasdaq posted its best quarter since 2020

NEW YORK (Reuters) – Wall Street rose more than 1% on Friday and the Nasdaq stock market posted its biggest quarterly percentage gain since June 2020, as signs of slowing inflation fueled hopes that the Federal Reserve may soon end its sweeping interest rate hikes.

The S&P 500 closed at its highest level since February 15 and posted profits for the second straight quarter, led by the technology sector (.SPLRCT) up 21.5% in the first quarter.

The quarterly gains came despite a sell-off in bank stocks in the wake of the collapse of two regional banks earlier this month and fears of a possible larger financial crisis.

The S&P 500 (.SPSY) financials was the worst-performing sector for the quarter, posting a 6.1% decline, while the KBW Regional Bank Index (.KRX) was down 18.6% for the period.

A Commerce Department report on Friday showed that US consumer spending rose moderately in February while inflation slowed.

“The stock market seems pleased with a slight decline in inflation, as it should be. It confirms that the Fed’s campaign is in fact working, albeit slowly,” said Quincy Crosby, chief global strategist at LBL Financial in Charlotte. , North Carolina.

The Federal Reserve was raising interest rates to calm inflation. Expectations for a 25 basis point rate hike at the May meeting have eased to around 50%, with a rate hike not expected to be as likely.

The Dow Jones Industrial Average increased 415.12 points, or 1.26%, to 33,274.15 points, the Standard & Poor’s 500 increased 58.48 points, or 1.44%, to 4,109.31 points, and the Nasdaq Composite Index increased 208.44 points, or. 1.74% to 12,221.91.

Over the course of the week and month, stocks also posted solid gains. The Nasdaq rose 6.7% in March.

For the quarter, the Nasdaq jumped 16.8% in the largest quarterly percentage increase since the three months ended June 2020. The S&P 500 rose 7% and the Dow rose 0.4% in the quarter, based on the latest data available.

Semiconductor stocks were among the strongest performers during the quarter, with the Philadelphia Semiconductor Index (.SOX) up 27.6%.

Big tech stocks rose as investors exited banks and US Treasury yields slumped, with the two-year bond yield on Friday posting its biggest monthly decline since 2008. Higher yields tend to be negative for big tech companies.

Shares of Apple Inc (AAPL.O) closed up 1.6% on Friday, up alongside other major companies. It also won its appeal against the British antitrust regulator’s decision to open an investigation into the mobile browser and cloud gaming services.

Also on Friday, Boston Fed President Susan Collins said that wherever the US central bank stops raising interest rates, maintaining that level for some time will be critical in helping bring high inflation down to the 2% target.

Trading volume on US exchanges reached 11.98 billion shares, compared to an average of 12.74 billion full sessions over the last 20 trading days.

Advances outnumbered losers on the New York Stock Exchange by a ratio of 4.78 to 1; On the Nasdaq, the ratio was 2.45 to 1 in favor of the advanced traders.

The S&P 500 posted 19 new highs in 52 weeks and no new lows. The Nasdaq Composite recorded 81 new highs and 131 new lows.

Reporting by Caroline Valitkevich. Additional reporting by Amruta Khandekar and Anika Biswas. Additional reporting by Johan M. Cherian; Editing by Vinay Dwivedi, Magu Samuel and Richard Chang

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