Stocks finished higher Friday, snapping a six-day losing streak for the Dow, as investors looked to an ease in market volatility amid stabilizing cryptocurrency prices and detailed comments on near-term rates hikes from Federal Reserve Chairman Jerome Powell.
The Dow Jones Industrial Average finished up 466 points, or 1.47%, to 32,196.66, while the S&P 500 gained 2.39% and the tech-heavy Nasdaq rose 3.82%.
Speaking with the Marketplace public radio show, Powell essentially confirmed the case for 50 basis point rate hikes at the next two policy meetings in June and July "“if the economy performs about as expected" and reiterated his view that a 75 basis point hike isn't being 'actively considered".
"But I would just say, we have a series of expectations about the economy," Powell said. "If things come in better than we expect, then we’re prepared to do less. If they come in worse than when we expect, then we’re prepared to do more."
Bets on a bigger move, given the surprising strength of underlying inflation found in core consumer prices last month, remained elevated, with the CME Group's FedWatch tool pegging the chances at around 12.8% for June and 12% for July.
Still, the broader assurance on the Fed's rate path looks to have at least neutralized one of the market's major concerns this week, while the other -- the ongoing upheaval in crypto prices -- has also calmed, with bitcoin climbing 6.9% in overnight trading to move past the $30,000 mark.
Evidence of a modestly firmer 'risk on' sentiment was seen in a pullback for the U.S. dollar, which traded at 104.636 against a basket of its global peers but remains on pace for its longest stretch of weekly gains in four years and still trades near to the highest levels in two decades.
Benchmark 10-year Treasury note yields rose to 2.929% amid one of the strongest weekly rallies in years, with data from Bank of America's 'Flow Show' report showing weekly inflows of $11.5 billion, the most since March of 2020.
The CBOE's benchmark volatility gauge, the VIX, was also in retreat, falling 9% to 28.87.
"Following a week of heavy selling, but with inflationary pressures easing just at the margin, and the Fed still seemingly wedded to 50 basis point hikes for each of the next two FOMC meetings, the market was poised for the kind of strong rally endemic to bear market rallies," said Quincy Krosby, chief equity strategist for LPL Financial.
"Still, given the history of bear markets, coupled with the fact that the Fed has just begun its rate hike cycle and would like to see financial conditions continue to tighten so that demand pulls back further, this rally will most likely weaken," he cautioned.
Twitter (TWTR) shares tumbled 9.7% after Tesla (TSLA) CEO Elon Musk said his $44 billion 'take private' deal for the social media group is "temporarily on hold".
Musk made the declaration through his verified Twitter account early on Friday in response to a Reuters story from May 2. The story, based on a Twitter 10-Q filing with the Securities and Exchange Commission, stated that Twitter had 229 million users who viewed consistent ads, adding that fewer than 5% of its so-called 'monetizable daily active users' were false or spam accounts.
Robinhood Markets (HOOD) shares surged 24.9% after the CEO of cryptocurrency exchange FTX revealed a 7.6% stake in the online trading platform.
Samuel Bankman-Fried made his investment public late Thursday in an SEC filing, but noted he wasn't planning to build a controlling stake in the beaten-down trading platform. Robinhood, via its verified Twitter account, said Bankman-Fried's move was "an attractive investment."
General Electric (GE) shares moved 2.4% higher as investors reacted to comments from CFO Carolina Dybeck Happe that suggested the industrial group would see a broad improvement in cash flow over the second half of the year.
Dybeck Happe told the Goldman Sachs Industrials & Materials Conference that, while "nothing is certain in an environment where so much is changing day to day" she was confident that the group would see "a path to significant growth in the second half."
