The S&P 500 gains more than 1%, reaching its highest level in five months, as Meta leads a tech-driven rise
The S&P 500 rose to its highest level in five months on Thursday as better-than-expected Meta results further improved sentiment around technology shares, which led the market lower last year.
The S&P 500 was up 1.85% at one point. January’s jobs report looms Friday.
Tech stocks have outperformed in 2023, buoyed by recent signals of cooling inflation that investors expect could lead to a pause from the Federal Reserve in its aggressive rate hiking campaign. The S&P 500 information technology sector is up more than 14% this year after a decline of more than 28% last year.
“It’s showing that growth is outperforming value as it unwinds some of the pressures that hawkish rhetoric brought to risk markets over the course of 2022,” said Keith Buchanan, senior portfolio manager at GLOBALT Investments.
The S&P 500 is headed toward another positive week, following its strongest January showing since 2019. However, analysts believe some stocks are getting ahead of themselves and are set to fall.
As of Thursday afternoon, the broad market index is up more than 2% for the week. The Nasdaq Composite surged nearly 5%, while the Dow Jones Industrial Average oscillated around the flat line.
Investors’ optimism that the Federal Reserve will soon ease up on its monetary policy has fuelled the rise in the major indexes, despite Chairman Jerome Powell saying it is “premature” to declare victory on inflation.
The tech stock rally has also contributed to the benchmark indexes’ gains in 2023. For example, Meta shares have jumped nearly 30% this week, surging after the social media company posted a quarterly revenue beat. Shares are up more than 60% for the year.
Nonetheless, analysts don’t expect many stocks to sustain their early-year momentum, cautioning that investors are being too optimistic about the Fed’s stance on inflation.
We used FactSet data to screen for S&P 500 stocks whose consensus price targets indicate an expected decline.
S&P 500 TECHNICAL ANALYSIS
S&P 500 is currently trading in up channel.
S&P 500 is currently trading above all SMA
RSI is in buying zone which suggests bullishness and Stochastic is suggesting no trend.
S&P 500 immediate resistance is at 4206.84 & its immediate support level is 4135.45
HOW TO TRADE S&P 500 IN THIS WEEK
S&P 500 is trading in up channel; it will continue to trade upside until any trend reversal so, remain bullish on it.