Market Movers: Dovish Fed and Big Tech Wins Boost Wall Street

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Wall Street Bounces Forward

Last week, Wall Street rode a wave of optimism, with the S&P 500 marking a series of weekly gains. The shift came as the Federal Reserve softened its stance, and the job market’s latest figures came in more subdued than expected. The resilience of employment had been a worry for the Fed, but the latest report offered a breath of relief for investors.

Amidst these economic twists and turns, the corporate earnings season was in full swing, with tech giants like Amazon and Apple stealing the show. Apple, in particular, made headlines with a jaw-dropping $110 billion share buyback plan, stirring excitement on the trading floor. This cocktail of news pushed the S&P 500 up by 0.6%, the Dow Jones increased by 1.1%, and the Nasdaq Composite jumped ahead with a 1.4% rise.

Fed Takes a Measured Step

Federal Reserve Chair Jerome Powell has been speaking in a more dovish tone lately, despite the ongoing battle with stubborn inflation suggesting a rocky road to stable prices.

The Fed’s choice to keep interest rates steady at 5.25% to 5.50% for the sixth time, along with easing off on tightening the financial strings, caused Treasury yields to take a slight dip. Analyst Christopher Robb took note of Powell’s softer voice but didn’t miss his firm commitment to keeping long-term inflation in check.

Tech Giants Report Card

Tech titans were in the spotlight with their latest earnings reports. Amazon surpassed Wall Street forecasts, particularly shining with its cloud services, but their future sales outlook came with a dose of skepticism. A clear signal of their bet on the future, Amazon announced hefty investments in generative AI, quieting any buzz about potential dividends.

Meanwhile, Apple’s report card eased nerves over iPhone demand in China and disclosed some weaknesses across product lines. Nevertheless, a hefty buyback promise and a dividend hike sent Apple’s shares up by 6% in after-hours trading.

The Buzz on Cannabis Stocks

Cannabis stocks lit up following whispers that the Justice Department might reclassify marijuana, potentially easing federal restrictions. A shift to Schedule III, allowing for prescription use, would be a game-changer for the industry, offering significant tax perks. Marijuana-focused ETFs and company shares, such as Canopy Growth and Tilray, shot up by an impressive 80% and 40%.

This news took the market by surprise, vindicating the predictions made by members of the WallStreetBets online community just weeks before and highlighting the market’s acute reaction to shifts in the regulatory landscape.