By Yasin Ebrahim
Investing.com -- The Dow racked up gains Friday, to notch its fourth-straight weekly gain driven by a chip-led rally in tech as signs of easing inflation pressures this week stoked bullish bets on stocks.
The Dow Jones Industrial Average added 1.3%, or 424 points, the Nasdaq was up 2.1%, and the S&P 500 gained 1.7%.
Technology stocks were underpinned by a nearly 3% jump in semiconductor stocks as dip-buying in Micron Technology Inc (NASDAQ:MU) and NVIDIA Corporation (NASDAQ:NVDA) continued after the duo plunged earlier this week on profit warnings.
As well as rallying chip stocks, big tech was also in the ascendency. Apple (NASDAQ:AAPL) was up more than 2% after the tech giant reportedly told iPhone suppliers to ramp up production amid expectations for sales to remain steady despite a slowing market.
Tech gained about 2% this week on easing fears of a deep recession and signs of easing inflation that has pressured U.S. Treasury yields.
“Treasury yields have come down, allowing the sector to be valued higher than it was before … [boosting] the mega cap tech stocks that dominate the equity indexes,” Jimmy Lee, the founder and CEO of The Wealth Consulting Group, told Investing.com in an interview on Thursday. "The idea that we're not going to be in a bad recession, and a recession could be short lived," Lee added, has also played a role in the recent run-up in big tech.
While this is “not good news for the Fed,” Jefferies said in a report, the decision of whether the central bank hikes rates by 50 basis points to 75 points in September “is going to depend on the August employment data and CPI that are released closer to the meeting next month.”
Minutes of the Federal Reserve's July meeting, slated for next week, will be closely watched for further clues on the central bank's rate hiking plan.
Energy, meanwhile lagged the market’s move higher as oil prices slipped more than 2% as OPEC, in contrast to the International Energy Agency’s report earlier this week, cut its outlook on oil demand amid global growth worries.
The earnings front served up mixed quarterly results as Toast jumped, while Illumina slumped.
Toast (NYSE:TOST) lifted its full-year earnings guidance after reporting a narrower-than-expected quarterly loss, driven by increasing demand for its restaurant payment technology. Its shares were up more than 7%.
Illumina (NASDAQ:ILMN), however, fell more than 8% after delivering gloomy guidance that fell short of Wall Street estimates following second-quarter results that missed on both the top and bottom lines.
Rivian Automotive (NASDAQ:RIVN) was flat after forecasting a deeper annual loss, though investors appeared to take solace from production guidance that remained unchanged despite supply-chain issues.
In other news, Peloton Interactive (NASDAQ:PTON) jumped more than 13% as the exercise equipment maker reportedly readies more job cuts and aims for price hikes to strengthen its balance sheet.