Traders work on the floor at the New York Stock Exchange on Feb. 1, 2024.
Brendan Mcdermid | Reuters
The S&P 500 was higher on Friday as quarterly results from technology companies including Facebook-parent Meta buoyed the sector after a stronger-than expected jobs report.
Shares of Meta popped more than 22% after the social-media giant defied analysts’ expectations. The Facebook-parent also announced it will pay a quarterly dividend for the first time, and it authorized a $50 billion share buyback program. Amazon shares jumped 8% on fourth-quarter beats.
The rise in tech stocks helped shift investor focus from a scorching jobs report earlier on Friday. The benchmark 10-year Treasury yield jumped 17 basis points to 4.03% after the government reported the U.S. economy added 353,000 jobs in January, well above the Dow Jones estimate of 185,000.
The report also included inflationary data in the form of greater-than-expected wage growth. Wages expanded by 4.5% year over year, more than a 4.1% forecast. This comes after Fed Chair Jerome Powell signaled this week that a March rate cut was unlikely.
“The economy is accelerating at the same time the Fed plans to cut rates,” said David Russell, global head of market strategy at TradeStation. “The result could be a Fed cutting less, which means they’ll have more dry powder for a slowdown when it comes. That helps long-term investors and main street feel more confident chasing new highs.”
The strong jobs report can also indicate inflation will remain in check as productivity remains robust, which will support growth for stocks, Russell added.
“Longer term, stocks could be in a strong spot with accelerating economic growth supporting consumption and earnings,” he said.
Stocks are on pace to end the week higher despite Wednesday’s slump. The 30-stock Dow and Nasdaq have ticked up roughly 1% from the start of the week, while the S&P 500 has climbed 1.2%, respectively.