US stocks closed higher on Friday, driven by strong tech earnings and a surprising jobs report. Shares of Nvidia, Meta Platforms, and Microsoft reached fresh highs, contributing to the gains. The Dow rose 0.4%, the S&P 500 reached a record-high close with a 1.1% gain, and the Nasdaq Composite climbed 1.7%. The positive performance led all three major indexes to end the week on a positive note.
The US economy added an impressive 353,000 jobs in January, surpassing economists’ expectations of 176,500 jobs. This data, released by the Bureau of Labor Statistics, caused Treasury yields to spike as investors analyzed the report. The 2-year yield rose to 4.37%, indicating that some investors believe an interest rate cut in March is unlikely. Federal Reserve Chair Jerome Powell had already hinted at this during the central bank’s recent decision to maintain rates at a 23-year high.
Tech stocks emerged as winners during Friday’s session, buoyed by strong earnings reports from Meta Platforms and Amazon. Meta Platforms saw its shares surge by 20.3% to a record high of $474.99 after reporting increased profits, announcing its first-ever cash dividend, and initiating a $50 billion share buyback. Amazon shares also rose by 7.9% following solid earnings for the latest quarter. Other tech stocks, including Nvidia and Microsoft, also experienced gains, with Nvidia reaching a record-high close of $661.57 and Microsoft closing at a fresh record high of $411.22.
However, not all sectors performed equally well. The equal-weighted S&P 500 index, which gives each stock the same influence over its performance, fell by 0.8% on Friday. The Russell 2000 index, tracking the performance of US small-cap stocks, also declined by 0.5%.
Looking ahead, investors will be closely monitoring US Secretary of the Treasury Janet Yellen’s testimony before the Senate Banking Committee next week. This comes in the aftermath of the regional banking crisis last year, and market participants will be seeking clues about the health of the US financial system. The recent surprise $252 million loss in fourth-quarter profits from New York Community Bancorp has brought regional banks back into focus.
In conclusion, US stocks rallied on Friday due to strong tech earnings and an unexpectedly robust jobs report. The performance of tech giants like Nvidia, Meta Platforms, and Microsoft contributed to the overall gains. The positive jobs data also led to speculation that an interest rate cut in March is unlikely. However, not all sectors experienced the same level of success. Investors will be closely watching Janet Yellen’s testimony and monitoring the health of the US financial system in the coming weeks.