Stock Market This Week (US): Why did Nasdaq rally 5% this week?

Stock Market This Week (US)

US markets jumped this week on some prominent quarterly earnings reports and hints that the US Central Bank might moderate its pace of interest rate hikes. Energy shares outperformed within the S&P 500, as oil prices proved resilient despite the announcement of a release from the US Strategic Petroleum Reserve while the real estate sector lagged. For the week, the Dow Jones rose 4.9%, S&P 500 gained 4.7% while Nasdaq ended 5.2% higher. 

US stock market this week: Stocks movement this week

US stocks closed higher on Monday after the UK government reversed its tax policy and solid earnings reports from a batch of companies gave a boost to investors’ confidence. All three major indexes ended in positive territory.

US markets ended higher on Tuesday for the second straight day as another batch of solid earnings reports gave investors’ confidence a boost. Also, treasury yields eased on Tuesday. All three major indexes ended in positive territory.

US stocks ended lower on Wednesday despite another batch of mostly impressive earnings reports, as a rise in Treasury yields failed to sustain the rally that started earlier this week. All three major indexes ended in negative territory.

US markets ended lower on Thursday despite strong earnings releases, on fears of aggressive rate hikes in November as suggested by a Fed official. The benchmark US 10-year treasury yield climbed past 14-year highs. All three major indexes ended in negative territory.

US stocks soared on Friday as investors parsed through a medley of corporate financial results and pondered the possibility Federal Reserve officials may ease aggressive rate increases sooner than anticipated.

US stock market this week: Major events

Fed officials on rate hike: Minneapolis Fed Bank President Neel Kashkari said in a speech that “if we don't see progress in underlying inflation or core inflation, I don't see why I would advocate stopping [rate hikes] at 4.5%, or 4.75% or something like that.”

However, stocks bounced after The Wall Street Journal reported that “some officials have begun signaling their desire both to slow down the pace of increases soon and to stop raising rates early next year to see how their moves this year are slowing the economy.”

Quarterly Results: Major companies reported quarterly results this week. Bank of America posted strong third quarterly results beating street estimates on higher trading revenue and rising interest rates. Netflix stock jumped on strong third quarter results on strong subscriber growth. However, Tesla stock fell after its quarterly revenue of $21.45 billion missed analysts’ estimates. Snap stock fell 29% after its quarterly revenue of $1.13 billion missed analysts’ estimates. 

Treasury Yields: The hawkish Fed comments pushed the yield on the benchmark 10-year U.S. Treasury note to a 14-year high of 4.33% on Friday morning. (Bond prices and yields move in opposite directions.)

Macroeconomic update: Weak housing market was a focus following sharp declines in mortgage applications and housing starts, along with analysts’ downgrades of home supply stores Home Depot and Lowe’s. An index of homebuilder sentiment also fell more than expected and hit a 10-year low. Manufacturing production, however, rose more than expected in September (up 0.4%). Jobless claims for the week ended October 15 fell much more than anticipated to their lowest level since late September.