U.S. stocks marched higher on Friday, as a gain in Apple shares boosted all three major indices and offset a slide in Amazon. Investors also parsed economic data that strengthened the case for the Federal Reserve's aggressive path, ahead of the central bank's policy meeting next week.
By mid-day, the tech-heavy Nasdaq Composite (COMP.IND) was up 1.67% at 10.972.73 points in morning trade. The benchmark S&P 500 (SP500) had added 1.55% to 3,866.17 points and the blue-chip Dow (DOW) had climbed 1.83% to 32,620.42 points. All three indices benefited from a ~7% surge in Apple after the iPhone maker topped quarterly estimates.
The S&P is on track to post solid weekly gains. The Dow is already up more than 4% for the week, as strong quarterly reports from its components have buoyed the index.
The Nasdaq is also on track to add about 1% for the week, despite a slump in megacap technology stocks.
Putting the outsize impact of those few major stocks in perspective, the S&P 500 Equal-Weighted Index (RSP) is up 4.5% for the week, more than double the rise in SPY.
All 11 S&P 500 sectors were trading in the green, with the exception of Energy and Consumer Discretionary. The latter slipped more than 2%, weighed down by Amazon.
The e-commerce giant slumped after a gloomy holiday sales forecast. But gains in Apple helped offset those losses. With their quarterly reports, the two companies bring an end to the FAANG earnings. The group saw a mixed bag of results, with Netflix and Apple the only bright spots. Along with Amazon, Facebook parent Meta and Google owner Alphabet also disappointed.
In other earnings news, Intel provided another boost to the Dow, with shares advancing 9% as investors cheered the chip giant's quarterly beat and plans to cut jobs. Oil majors ExxonMobil and Chevron gained after posting some of their highest ever quarterly profits.
After falling for three days straight, rates were higher on Friday. The 10-year Treasury yield (US10Y) was up 5 basis points to 3.99%. The 2-year yield (US2Y) was up 8 basis points to 4.40%. The dollar (DXY) was +0.4%.
In economic news, U.S. consumer spending increased more than expected in September, with the data showed only modest inflation relief. Personal income and outlays came in at +0.4% above the +0.3% consensus.
Additionally, September pending home sales sank 10.2% M/M to 79.5 compared to the forecasted -3.8%. Employment cost index for Q3 came in at +1.2% Q/Q, matching consensus.
The Fed's policy meeting is next Wednesday, where it is widely anticipated to raise interest rates by 75 basis points. However, speculation has been rife as to the path of the central bank after. Market participants will be closely watching next week for any comments on tightening from policymakers.
"The main development should be the forward guidance in the FOMC statement and in Chair Powell’s prepared remarks at the press conference," JPMorgan's Michael Feroli said in a preview note.
"Since March, the post-meeting statement has indicated that the Committee 'anticipates that ongoing increases in the target range will be appropriate.' We think this will be unchanged, but see a risk of it being softened to something like '…some further increases…'," Feroli added.
Among other active stocks, Pinterest surged following steady user numbers. DaVita was the top S&P 500 loser after the dialysis services provider lowered its guidance.