S&P 500 surges back above 4400, ends week in the green as Fed tightening bets ease post-softer wage data

US equity markets posted solid gains on the final trading day of the week. The S&P 500 gained 2.4% to close at 4430, the Nasdaq 100 gained 3.2% to close just under 14.45K after bouncing again at 14K and the Dow gained 1.7% to rally above 34.7K from an earlier session dip under 34K. Much of the surge came in late trade, but equities also got a lift before the open after US Q4 Employment Cost Index data showed a more pronounced than expected slowdown in wage pressures, news analysts said would be met with relief at the Fed, thus reducing the likelihood of a larger 50bps hike in March. Bond yields have eased on the session as a result, helping tech/growth names outperform, after a tough week for these stocks as market participants upped tightening bets after Fed Chair Jerome Powell’s hawkish post-Fed meeting remarks.

The market was led by a more than 6% surge in Apple’s share price back towards $170, a more than 9% rebound from earlier weekly lows under $155, leaving shares only just over 7.0% above recent record highs at $183. The company posted better than expected top and bottom-line earnings results for Q4 after Thursday’s close, with iPhone sales in the quarter hitting a new record. Apple’s results come following a busy last few sessions for earnings, with 168 of the 505 S&P 500 companies having now reported for Q4. According to Refinitiv data cited by Reuters, 77% of those companies have beaten analyst expectations.

But the S&P 500 only closed the week 0.8% higher, the Dow 1.3% higher and the Nasdaq 100 0.1% higher. Analysts noted that investors have been more focused on earnings guidance, especially relating to how ongoing global supply chain snags are expected to impact earnings in the coming quarters. On this topic, the news has been mixed this week. Recall Tesla collapsed more than 10% on Thursday due to negative commentary regarding the impact of supply chains in the coming months. Elsewhere, Caterpillar’s share price, seen as a bellwether for the health of the global economy, fell more than 5.0% on Friday after the co. warned about higher production and labour costs.