Stock market today: Wall Street rallies as economy keeps growing and profits keep rising

NEW YORK –

Stocks are rallying Thursday following a powerful revenue report from Facebook’s mum or dad firm and the newest indicators that the financial system continues to defy predictions for a recession.

The S&P 500 was 0.9% greater in early buying and selling, near its highest degree in almost 16 months. The Dow Jones Industrial Average was up 84 factors, or 0.2%, at 35,604, as of 9:40 a.m. Eastern time, and on monitor for a 14th straight acquire. The Nasdaq composite, in the meantime, was main the market with a acquire of 1.6% following a powerful revenue report from Meta Platforms.

Earnings rose extra for Meta, which owns Instagram and WhatsApp along with Facebook, than analysts anticipated after its companies attracted further energetic members. Meta is considered one of Wall Street’s most influential shares due to its huge dimension, and it rose 8.2%.

McDonald’s was serving to to prop up the Dow after it simply topped analysts’ forecasts for earnings through the spring. Its gross sales grew worldwide, and its inventory rose 1.7%.

In the bond market, Treasury yields had been rising after a wave of stories indicated the financial system is in stronger form than anticipated.

One estimate mentioned progress for the general financial system accelerated within the spring. That simply topped forecasts from economists, who had been anticipating a slowdown from the primary three months of the 12 months. That report additionally instructed a measure of inflation wasn’t as excessive from April by means of June as anticipated.

Another report, in the meantime, mentioned that fewer employees utilized for jobless advantages final week. It’s the newest indication the job market stays remarkably strong, whereas one other report mentioned orders for long-lasting manufactured items strengthened greater than anticipated final month.

All the information helped maintain Wall Street ebullient amid hopes the financial system can maintain defying predictions for a recession regardless of a lot greater rates of interest.

The Federal Reserve on Wednesday raised its federal funds price to its highest degree in additional than twenty years in hopes of dragging inflation decrease. High charges work by bluntly slowing your complete financial system and hurting costs for shares and different investments. After zooming greater from just about zero early final 12 months, the sudden shock greater in rates of interest has had traders on an extended look ahead to a possible recession.

Fed Chair Jerome Powell on Wednesday, although, mentioned any additional will increase in charges will depend upon what stories say concerning the path of inflation and financial system sooner or later. That bolstered hopes amongst merchants that Wednesday’s improve might have been the ultimate considered one of this cycle.

Investors see greater rates of interest as hurting know-how and different high-growth shares specifically, which is a part of why Big Tech shares had been serving to to steer the market on Thursday past Meta’s fats revenue report.

Hopes for a halt to price hikes are elevating bets that the Fed can pull off what’s known as a “soft landing” for the financial system, the place excessive inflation can come all the way down to the Fed’s goal with out inflicting a painful recession.

Such hopes have helped launch shares greater this 12 months, however critics say the market might have gone too far, too quick. While inflation has come down from its peak final summer time, it is nonetheless excessive and the toughest a part of the Fed’s activity should be forward. A recession should in the end hit, they are saying.

But on Thursday, a minimum of, optimism appeared to rule markets.

Stocks additionally climbed in Europe after the European Central Bank raised rates of interest. The French CAC 40 jumped 1.9%, and Germany’s DAX returned 1.4%.

Asian inventory indexes had been additionally principally greater, led by a 1.4% rally for Hong Kong’s Hang Seng.

In the bond market, the yield on the 10-year Treasury rose to three.89% from 3.98% late Wednesday. It helps set charges for mortgages and different necessary loans.

The two-year Treasury yield, which strikes extra on expectations for the Fed, rose to 4.88% from 4.85%.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.