The stock market continued to rebound on Friday—with the S&P 500 notching its biggest weekly gain in more than a year—as investors react positively to the Federal Reserve’s latest interest rate hike this week and continue to hope for some kind of resolution to the war between Russia and Ukraine.
The Dow rose 0.8%, nearly 300 points, while the S&P 500 gained 1.2% and the tech-heavy Nasdaq Composite 2.1%.
Stocks have rebounded sharply after a massive three-day surge: The S&P 500 notched its best week since November 2020 after rallying 5%, while the Dow also rose roughly 5% this week and the Nasdaq 7%.
Tech stocks led the market higher on Friday, while some consumer-related names also rallied: Shares of Apple rose 2.1%, Microsoft 1.8%, Nvidia 6.8% and Nike 3%.
Markets have taken a breather in recent days as investors continue to assess the ongoing war between Russia and Ukraine as well as the Federal Reserve’s efforts to deal with high inflation; the central bank on Wednesday hiked interest rates for the first time since 2018.
After announcing a 0.25% rate hike and predicting six more increases this year, Fed chair Jerome Powell warned that higher energy prices as a result of the Russia-Ukraine conflict will likely “create additional upward pressure on inflation and weigh on economic activity.”
Investors remain hopeful for some kind of resolution to the conflict even as heavy fighting continues in several major Ukrainian cities, while U.S. President Joe Biden meanwhile told Chinese President Xi Jinping on a call Friday that the conflict is not in “anyone’s interest.”
“Markets are showing remarkable resilience this week given the continued uncertainty and headwinds,” even as volatility “remains intense,” says Nationwide chief of investment research Mark Hackett. Stocks have rallied in recent days thanks to “optimism for a resolution” to the Russia-Ukraine conflict, while investors also successfully “shrugged” off the Federal Reserve’s latest rate hike and hawkish commentary, he says.
Oil prices, which spiked as high as $130 per barrel earlier in March, continued to swing this week, rising 1.5% on Friday. The price of U.S. benchmark West Texas Intermediate now stands at $104 per barrel, while international benchmark Brent crude trades at around $107 per barrel.
“The end of another long week has Wall Street bracing for another roller-coaster ride,” says Edward Moya, senior market analyst at Oanda. “The days of seeing all the sectors in the S&P 500 being green appear to be long gone,” he muses, adding that it could be a “choppy ride” ahead for investors. Traders continue to rotate out of financials, “FAANG stalwarts have been oversold for too long” and energy stocks “might have hit their peak” as markets have already priced in higher oil prices, Moya describes.
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