Stocks Rose Despite Fed’s Hawkish Comments Earlier This Week…..

U.S. stocks finished higher in the final session of the week, putting an end to the three-week losing streak. The markets showed resiliency in the face of solidified expectations that the Fed will remain aggressive despite a slowdown in economic growth and following yesterday’s historic rate hike by the European Central Bank. Earnings news was upbeat, with Zscaler, DocuSign, and Kroger all rallying after topping profit projections and issuing upbeat guidance. The economic front was relatively quiet, but wholesale inventories for July were revised lower. Treasury yields rose, and the U.S. dollar pulled back from multi-decade highs. Crude oil and gold prices both increased. Asia finished broadly higher, and Europe also saw widespread gains.

The Dow Jones Industrial Average rose 377 points (1.2%) to 32,152, the S&P 500 Index gained 61 points (1.5%) to 4,067, and the Nasdaq Composite went up 250 points (2.1%) to 12,112. In moderate volume, 3.9 billion shares of NYSE-listed stocks were traded, and 4.3 billion shares changed hands on the Nasdaq. WTI crude oil moved $3.25 higher to $86.79 per barrel. Elsewhere, the gold spot price increased $6.90 to $1,727.10 per ounce, and the Dollar Index dropped 0.7% to 108.97. Markets ended noticeably higher for the week, as the DJIA climbed 2.7%, the S&P 500 jumped 3.7%, and the Nasdaq Composite soared 4.1%.

Treasury yields were higher, as the yield on the 2-year note rose 8 basis points (bps) to 3.57%, the yield on the 10-year note gained 2 bps to 3.32%, and the 30-year bond rate ticked 1 bp higher to 3.46%.

U.S. stocks finished out the holiday-shortened week in the green, snapping a three-week string of losses. The markets showed some resiliency in the face of rising Treasury yields and a fresh multi-decade high for the U.S. dollar. Equities gained ground even as Fed Chairman Jerome Powell reiterated his hawkish tone set a couple weeks ago in Jackson Hole, Wyoming, and as Australia and Europe tightened their monetary policies amid the persisting inflation pressures and despite signs of slowing economic activity. Stocks found some support as bond yields stabilized and the U.S. dollar pulled back as the week matured, while the ISM Services Index and the Fed’s Beige Book suggested supply chain issues and the inflation picture may be starting to improve. Most sectors gained ground, led by Consumer Discretionary, Materials, Health Care, and Financials, though Energy stocks lagged as crude oil prices fell for a second-straight week.

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