The Nasdaq, S&P, and Dow are off to a good start this week as investors eagerly anticipate Jerome Powell’s testimony and the upcoming jobs report on Friday. The market is looking for more clarity on the central bank’s policies as Powell’s comments will set the expectations for the Federal Reserve’s monetary policy committee meeting later this month.
Tech-heavy Nasdaq Composite led the way, rising 0.85% to 11,787.86 points by mid-day, thanks to the strength of Apple (AAPL) and other tech stocks. The benchmark S&P 500 also added 0.63% to 4,070.98 points, while the blue-chip Dow was up 0.40% to 33,526.15 points.
Of the 11 S&P sectors, nine were trading in the green, with Technology and Communication Services leading the way. However, Materials and Energy were the two sectors trading in the red.
The S&P 500 posted a nearly 2% weekly gain last Friday, breaking a three-week losing streak. This gain resulted from the recalibration of market participants’ expectations for the peak Fed rate after economic data supported further tightening.
Federal Reserve Chair Jerome Powell will appear before Senate and House committees for a two-day testimony starting Tuesday. The jobs report on Friday is also being closely monitored and will provide hints about the highly resilient labor market.
The recent payroll report published on February 3rd significantly affected financial assets, especially bonds, resulting in the worst February on record for the Global Agg. The 10-year Treasury yield hit 3.33% before closing out at 3.95% last Friday, indicating that investors are trying to navigate the unpredictable market conditions.
Meanwhile, Apple rose more than 2% after Goldman Sachs started coverage on the company with a buy rating. Medical device company DexCom (DXCM) was the top percentage loser on the S&P 500 (SP500) while Ciena (CIEN) experienced a jump in its stock price after the company announced positive figures in its latest earnings report.
In economic data, January’s factory orders came in above the forecasted figure, showing -1.6% instead of the expected -1.8%.
As the week progresses, investors remain hopeful that Powell’s testimony and the jobs report will provide more clarity and direction for the market.
