NEW YORK, February 23, 2024 – U.S. stock markets rebounded Friday, snapping a three-day losing streak as encouraging consumer confidence data tempered concerns about the Federal reserve’s interest rate policy. The Nasdaq Composite led the gains, rising 1% despite being on track for a weekly decline of approximately 3%.
Wall Street Rebounds on Consumer Confidence, fed Signals
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Stocks climbed friday, fueled by positive consumer sentiment and continued commitment from the Federal Reserve too tackle inflation.
- The Nasdaq Composite rose 1%, while the S&P 500 gained the same amount.
- The University of Michigan’s consumer confidence index for February rose to 57.3,exceeding expectations.
- Federal Reserve officials continue to emphasize the importance of bringing inflation back to 2%.
- Amazon shares fell sharply despite strong quarterly results, while Eli Lilly saw a boost after a setback for a competitor.
- European markets also posted gains, with the Euro Stoxx 50 up 1%.
The S&P 500 also added 1%,positioning it to close the week near parity. The CBOE Volatility Index (VIX) decreased by 7% to 20, a level often considered a dividing line between market stability and turbulence.
What’s driving investor optimism? The University of Michigan’s consumer confidence index for February registered at 57.3, surpassing the previous month’s 56.4 and exceeding the consensus estimate of 55.
On the monetary policy front, Raphael Bostic, president of the Atlanta federal Reserve, reiterated the central bank’s commitment to lowering inflation to 2% through interest rate management. “what I’ve learned is that we don’t really want inflation,” Bostic stated in a Bloomberg TV interview. “Once inflation takes root in people’s minds, it changes the way the economy evolves, and that’s one of the reasons why I think we need to maintain restrictive policy so that we get inflation back to 2%.”
Stocks in Focus
Amazon shares dropped 9% despite reporting quarterly results that largely exceeded expectations, including stronger-than-anticipated spending on artificial intelligence. Eli Lilly rose 4% after the Food and Drug Administration denied marketing approval for an anti-obesity drug developed by Novo Nordisk.
Molina Healthcare declined 15% following the release of lower-than-expected quarterly earnings. Reddit jumped 13% after fourth-quarter results surpassed expectations, accompanied by optimistic guidance for 2026. Strategy gained 7%, recovering from an earlier 4% loss after the market open, buoyed by the performance of Bitcoin.
European Markets Advance
european stock markets broadly moved higher. The Euro Stoxx 50 index increased by 1%, with Siemens Energy, Asml Holding, and Infineon among the leading performers. danone experienced a decline.
The Stoxx 600 index rose by 0.8%. Construction (+3.4%) and Energy (+2%) were the best-performing sectors, while the Automotive sector fell 3%.
In Milan, the FTSE Mib rose 0.2%. Buzzi, Prysmian, Telecom Italia, and Bper all saw gains of around 3%. stellar experienced important selling pressure, falling 23%.The Dax from Frankfurt increased 0.8%.
Macroeconomic Snapshot
WTI and Brent crude oil both rose 0.6%. Gold increased 3.5% to $4,940 per ounce, while silver gained 7%.
The yield on the 10-year Treasury note stood at 4.21%, while the two-year Treasury yield was at 3.48%. The spread between the 10-year and two-year Treasury yields reached its highest level in four years.
The dollar weakened 0.2% against the euro,trading at 1.179. Bitcoin surged 6% to $67,200, recovering from yesterday’s lows.
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