Stocks rose higher after a volatile session on Thursday as market participants bet the Federal Reserve is nearing the end of its rate hiking campaign as the recent banking sector crisis weighs on the U.S. economy. The Dow Jones Industrial Average climbed over 70 points, while the S&P 500 and Nasdaq Composite rose 0.3% and 1%, respectively.
Here's how the market settled on Thursday:
S&P 500 Index (NYSE: SPY): +0.29% or +11.33 points to 3,948.30
Dow Jones Industrial Average (NYSE: DIA): +0.23% or +73.66 points to 32,103.77
Nasdaq Composite Index (NASDAQ: QQQ): +1.01% or +117.44 points to 11,787.40
The Fed delivered a widely expected 0.25% interest rate hike on Wednesday, bringing the Federal funds rate to a target range of between 4.75% to 5%, which is its highest since October 2007.
"The U.S. banking system is sound and resilient," the Federal Open Market Committee (FOMC) said in a statement. "Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is uncertain. The Committee remains highly attentive to inflation risks."
Fed Chair Jerome Powell also acknowledged that the recent events in the banking system were likely to result in tighter credit conditions, but reaffirmed that the central bank is "committed to restoring price stability" in effort to bring inflation down to the Fed's desired level of 2% over time.
Technology shares benefited from investors reducing their Fed hike forecasts, as the sector was one of the hardest hit as the central bank raised rates for nine straight FOMC sessions. The SPDR Technology Select Sector (NYSE: XLK) rose over 2.5%, with shares of Microsoft (NASDAQ: MSFT), Apple (NASDAQ: AAPL) and Nvidia (NASDAQ: NVDA) among some of the biggest gainers.
Social media stocks also rose higher as TikTok CEO Shou Zi Chew testified before the House Energy and Commerce Committee on Thursday as the social media platform faces a potential ban in the United States. Shares of Facebook and Instagram owner Meta Platforms (NASDAQ: META) gained 3.5%, while Snap (NYSE: SNAP) rose over 4%.
Elsewhere for stocks, Block (NYSE: SQ) came under pressure on Thursday after short-seller Hindenburg Research released a new report alleging up to 75% of the company's payments accounts are fraudulent or second accounts from existing users.
"The 'magic' behind Block's business had not been disruptive innovation, but rather the company's willingness to facilitate fraud against consumers and the government, avoid regulation, dress up predatory loans and fees as revolutionary technology, and mislead investors with inflated metrics," the research firms wrote in the report.
Coinbase (NASDAQ: COIN) shares were also lower on Thursday after the cryptocurrency trading platform announced it has received a Wells notice from the U.S. Securities and Exchange Commission (SEC). The warning from the regulator implies that the SEC plans to recommend some kind of enforcement action following an investigation.
Ford (NYSE: F) said Thursday its electric vehicle business lost $2.1 billion last year on an operating basis. However, that loss of offset by an operating profit of $10 billion from its internal combustions and fleet businesses. For 2023, Ford expects an adjusted loss of $3 billion for its EV unit, adjusted earnings of roughly $7 billion for its internal combustion unit, and adjusted earnings of about $6 billion for its fleet segment.
"We've essentially 'refounded' Ford, with business segments that provide new degrees of strategic clarity, insight and accountability to the Ford+ plan for growth and value," CFO John Lawler said in a release.
Walmart (NYSE: WMT) is cutting hundreds of positions at five of its e-commerce fulfillment centers, the company confirmed to Reuters on Thursday. In a statement, the company said it made the cuts "to better prepare for the future needs of customers."
On the economic front, initial jobless claims unexpectedly fell on Thursday, totaling 191,000 for the week ended March 18, according to the Labor Department's report. That was a decline of 1,000 from the previous period, signaling continued strength in the labor market despite macroeconomic pressures on the U.S. economy.
Looking ahead, investors will continue to monitor developments in the banking sector for signs of contagion.