US stocks closed the week with their strongest gain since November on Friday, with tech giants Alphabet and Microsoft leading the rally after announcing impressive earnings. Alphabet even declared its first-ever dividend, sending its stock soaring over 10% to a record high and pushing its market value above $2 trillion.
Despite the Personal Consumption Expenditures (PCE) inflation index coming in hotter than expected, investors seemed to look past the data and focus on the positive earnings reports. Microsoft also saw a boost in its stock price after reporting strong results, particularly in its Azure cloud segment.
The broader tech sector followed suit, with Amazon, Nvidia, and Snap all experiencing gains. Analysts are optimistic about the tech sector’s performance, with Fundstrat’s Mark Newton noting that Alphabet and Microsoft’s earnings are paving the way for a broader rally.
Bank of America’s US equity chief Savita Subramanian also expressed confidence in the US economy, stating that despite slowing GDP and high inflation, the economy remains on solid footing.
Looking ahead, investors will be keeping an eye on upcoming earnings reports from Apple and Amazon, as well as the Federal Reserve’s next policy meeting scheduled for April 30-May 1.
In commodities, bonds, and crypto markets, West Texas Intermediate crude remained flat at $83.66 a barrel, while Brent crude fell slightly to $89.32 a barrel. Gold prices inched up to $2,351 per ounce, and the 10-year Treasury yield fell four basis points to 4.667%. Bitcoin dipped 1.5% to $63,875.
Overall, the strong performance of US stocks this week, fueled by tech earnings and optimism about the economy, has set a positive tone for investors heading into the next week of trading.
