IXIC: Nasdaq Composite Jumps 1.5% with Big Tech Leading Rally Ahead of Key Jobs Data

Investors went from six rate cuts to hopes of no rate hikes and today’s April jobs data will help set expectations.

• The Nasdaq Composite IXIC gained a solid 1.5% Thursday after money managers felt optimistic to raise their risk tolerance and bet on technology shares. The Nasdaq’s two peers — the S&P 500 and the Dow Jones — each rose by 0.9% with the broad-based S&P 500 snapping a two-day losing streak. Big Tech led the rally with Nvidia NVDA and Amazon AMZN shooting higher by more than 3% each.
• Apple shares AAPL rose 2.2% during regular trading and added another 6% in after-hours, following the iPhone maker’s not-that-bad earnings report. The company’s March quarter showed iPhone sales dropped 10% to $46 billion, just about half of total revenue of $90.8 billion, which dropped 4% from a year ago. It was Apple’s fifth quarter of declining growth of the last six. But investors expected worse.
• Meanwhile, markets are shifting their expectations from six interest rate cuts earlier this year to “let’s not see a rate hike at least” type of thinking. In his most recent speech, right after the Federal Reserve kept rates steady, chair Jay Powell flagged some inflation concerns. He cautioned that the central bank hasn’t been making progress on stamping out stubborn inflation. In a sigh of relief, the Fed boss said that there haven’t been any discussions about raising interest rates for now.
• But the Fed is data-dependent, meaning policymakers can change their mind if they see the economy is heating up again. To this end, Friday’s jobs data — the nonfarm payrolls — will provide another glimpse into how the economy is faring. If high interest rates are doing their job, employers’ hiring efforts should mark a cooldown. Analyst eyeball 238,000 new joiners to the workforce in April, lower than the 303,000 added in March.