Written by Yassin Ibrahim
Investing.com – It continued its run from record highs on Thursday as major tech stocks reaped gains after selling bonds lowering yields after weaker labor market data and cautious comments from Federal Reserve Jerome Powell.
The S&P 500 rose 0.4% after hitting a record intraday high of 4,097.30, gaining 0.04%, or 12 points, and gaining 0.97%.
Chairman Powell, who appeared during a hypothetical IMF committee debate on Thursday, brought up the central bank’s case to keep its monetary squeeze wide open, calming investor expectations that the central bank will have to act sooner than expected.
“There are brighter expectations for the US economy from financial support and vaccines, but the disparity in recovery is a serious problem,” Powell said, while reiterating that the current pace of monthly Fed bond purchases will continue. “We want to see a series of months like the March jobs report to see progress.”
The Fed Chairman’s dovish comments echoed the tone of the March FOMC monetary policy meeting minutes released on Wednesday. Fed policymakers acknowledged progress in the economy, but continued to support the continued pace of monetary support, saying that the major progress in the recovery will likely take “some time”.
Meanwhile, the job market continues to provide some credibility to the Fed Chairman’s continued cautious outlook as weekly jobless claims increased more than expected, lowering US bond yields and paving the way for large tech companies to continue their rally.
Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOGL), Facebook (NASDAQ: FB), Apple (NASDAQ: AAPL) and Amazon.com (NASDAQ: AMZN) continued to gain.
However, banks failed to join the rally in the broader market as troubled bond yields weighed on sentiment over the interest-rate sensitive sector ahead of earnings from major Wall Street banks next week.
Several banks JPMorgan (NYSE: JPM), Citigroup (NYSE: C), and Bank of America (NYSE: BAC) remained below the flat.
In other news, General Motors Corporation (NYSE 🙂 (NYSE: GM) plunged 1% as a global shortage of chips forced the carmaker to halt production at several factories.
Statements of the Federal President: