The S&P 500 ended higher on Thursday, with Microsoft and Tesla fueling a late-session rally while investors eyed the conflict in Ukraine and a potentially more aggressive Federal Reserve.
Gains in Microsoft Corp, Tesla Inc. and Apple Inc. helped lift the S&P 500.
Mega-cap growth stocks came under pressure earlier this week after comments from Fed policymakers and minutes from the central bank’s March meeting suggested a rapid removal of stimulus measures put in place during the pandemic.
Minutes released on Wednesday showed that Fed officials “generally agreed” to cut up to $95 billion a month from the central bank’s asset holdings even as the conflict in Ukraine tempered the first US interest rate increase since 2018.
“My biggest concern is, with the Federal Reserve be so aggressive, so as to slow that economic growth up until the point of a recession. I don’t think we’re there yet, but it’s certainly something to look out for.” said Kevin Mahn, president and chief investment officer at Hennion & Walsh Asset Management.
Traders now see 88.9% likelihood of a 50 basis-point rate hike at the central bank’s meeting next month.
US companies will start reporting first-quarter results in the coming weeks, with banks set to kick off the season in earnest next week.
Analysts on average expect S&P 500 companies’ earnings to have grown 6.4% in the March quarter, according to IBES data from Refinitiv. That compares with over 30% growth in the prior quarter.
” I think first quarter earnings will remain strong, but then earnings growth will start to slow. And if in fact the consumer starts to spend less, you can expect even more earnings deterioration as the year goes. If that doesn’t happen, you can see a little bit more economic growth and you could also see a little bit more stock market growth.” said Kevin Mahn, president and chief investment officer at Hennion & Walsh Asset Management.
The S&P 500 gained 19.06 points, or 0.43%, to end at 4,500.21 points, while the Nasdaq Composite gained 8.48 points, or 0.06%, to 13,897.30.
The Dow Jones Industrial Average rose 87.06 points, or 0.25%, to 34,583.57.
