Nasdaq bolsters Wall St as hopes grow for pause in rate hike

The Nasdaq led the rally among major Wall Street indexes as key rate-sensitive tech and growth stocks advanced after the Federal Reserve hinted it was about to pause rate hikes. interest in a context of turbulence in the banking sector.

As U.S. Treasury yields slid on rising hopes of an end to the Fed’s tightening cycle, Apple Inc, Microsoft Corp and Amazon.com Inc gained about 2% each on Thursday.

Nvidia Corp jumped 3.3% after Needham raised its price target on the chipmaker on likely earnings from near-term data center strength.

Communication services and technology stocks led the gains among the S&P 500 sector indices.

The U.S. central bank raised rates by 25 basis points on Wednesday, but its policy statement no longer says “continued increases” would likely be appropriate, indicating a clear shift in its stance.

The softer tone from the Fed provided relief to markets that have been rocked by concerns about the liquidity crunch in the banking sector since the failure of two regional US lenders earlier this month.

“The markets are hoping you’ll probably get another interest rate hike,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

“I imagine the hopes (of a rate cut) are dashed. You don’t want things to get so bad that you need a rate cut.

Traders’ bets are almost evenly split between the Fed suspending rate hikes in May and another 25 basis point hike, according to CME Group’s Fedwatch tool.

Meanwhile, troubled regional lender First Republic Bank fell 6% and extended losses amid volatile trading following Treasury Secretary Janet Yellen’s remark that there was no discussion on the insurance of all bank deposits.

Peers Truist Financial Corp and Western Alliance Bancorp, however, rose 2.1% and 4.4%, respectively.

Data showed jobless claims fell to 191,000 last week from the previous week, when the number was expected to rise to 197,000.

Globally, the Bank of England has raised interest rates by another quarter of a percentage point and expects Britain’s inflation spike to cool faster than before.

In early trading Thursday, the Dow Jones Industrial Average was up 398.52 points, or 1.24%, at 32,428.63, the S&P 500 was up 59.20 points, or 1.50%, at 3 996.17, and the Nasdaq Composite rose 251.34 points, or 2.15%, to 11,921.30.

Block Inc fell 12.8% after Hindenburg Research said it held short positions in the payments firm run by Jack Dorsey.

Coinbase Global Inc slid 11.1% after the U.S. Securities and Exchange Commission threatened to sue the crypto exchange over some of its products.

Accenture jumped 7.7% on plans to cut about 2.5% of its workforce.

Advancing issues outnumbered decliners for a 3.08-to-1 ratio on the NYSE and a 2.01-to-1 ratio on the Nasdaq.

The S&P index recorded four new 52-week highs and 10 new lows, while the Nasdaq recorded 42 new highs and 130 new lows.