Stocks rose Thursday, as Wall Street tried to rebound from a long string of weekly declines.
The Dow rose 500 points, or 1.5%. The S&P 500 climbed 1.6%. The Nasdaq Composite gained 2%.
The Dow has fallen the last eight weeks, while the S&P 500 and Nasdaq are riding seven-week losing streaks. However, the market seems to have somewhat regained its footing this week, as investors hope inflation is starting to peak and that there’s good value to be found at these levels.
The Dow and S&P 500 are up 4% and 3%, respectively, for the week. The Nasdaq is also up 2%. The Dow has also posted gains in the last four sessions.
Some remain distrustful of the rally as stocks have been on a persistent downward trend since the start of year, despite the relief bounces sprinkled throughout.
“We view this week’s rally in equity markets as technical in nature and not a change in the overall trend,” Zachary Hill, head of portfolio strategy at Horizon Investments, told CNBC. “It is too early to shift focus from inflation to growth.”
“Tighter financial conditions suppressing demand in the real economy remain the channel through which the Fed hopes to cool inflation,” he added. “Until that changes, rallies like we are seeing in equity markets this week, while somewhat expected after almost two months of relentless declines, are likely to be short-lived. “
Stocks rallied higher after strong earnings from the retail sector gave a boost to investor sentiment, which was bruised by disappointing results from big-box retailers last week. Macy’s shares surged 15% after the company, and Williams-Sonoma rose 12% after beating estimates on the top and bottom lines.
Discount retailer Dollar Tree jumped 17% after posting an earnings beat and helped push the Nasdaq higher. Dollar General also reported strong earnings, adding 12% to its shares.
PVH, Ralph Lauren and Ulta were also among the top performers in the S&P 500. The SPDR S&P Retail ETF gained 4%. Investors are looking forward to Costco’s quarterly results, which it will report after the bell.
Shares of chipmaker Nvidia bounced after falling onand a warning of a slowdown in hiring. Shares reversed and climbed 4% after a slew of analysts on the shares and highlighted momentum in the company’s data center business.
Though first-quarter earnings for the market as a whole have been largely in line with historical trends, there have been dramatic pullbacks for some major stocks after earnings reports as investors look for the impact of inflation and slowing economic growth.
“If there’s any reason to sell, they’re embracing it,” said Jeremy Gonsalves, national director of portfolio management at BNY Mellon Wealth Management.
Elsewhere, Twitter shares jumped more than 5% after Elon Muskto $33.5 billion, which analysts have said indicates a new seriousness and increased probability that he’ll complete the deal.
Chipmaker Broadcomcloud company VMware in a $61 billion deal, which would be one of the biggest tech acquisitions of all time. Broadcom shares gained more than 1%, and VMWare rose slightly.
The financial sector was higher by about 2%. Bank stocks were higher across the board with Wells Fargo and Morgan Stanley each up about 3% and Bank of America and Goldman Sachs gaining more than 2%.
On the flipside, software stock Snowflake tumbled 12.5% after the company’s guidance for operating margin.
First-quarter gross domestic product, worse than the 1.3% Dow Jones estimate and a writedown from the initially reported 1.4%, the Commerce Department reported Thursday.
Initial jobless claims for the week ending May 14, which was an increase from the previous period and slightly higher than the 215,000 estimate.
— CNBC’s Jeff Cox contributed reporting.