Tech News Summary:
- Canada’s main stock index gained almost 150 points on May 26, 2023, due to broad-based strength in the market and the continued outperformance of technology stocks.
- Fresh data released on Friday indicated that central banks’ fight against inflation may not be over, leading to investor apprehension about a potential rate hike by the Federal Reserve and the impact it would have on Bank of Canada’s monetary policies.
- Tech stocks continued their outperformance on Friday, with the Nasdaq rising over 2%, while uncertainties regarding the US debt ceiling talks still lingered in the market.
In an encouraging sign for investors, stocks soared on Wednesday, with the S&P/TSX Composite surging nearly 150 points while U.S. markets rallied, driven by positive news surrounding the COVID-19 pandemic and a promising start to corporate earnings season.
The S&P/TSX Composite, the primary index for the Canadian equity market, gained 146.79 points or 0.8% to close at 18,312.47. The index was led higher by strong performances from the technology, materials, and energy sectors.
Meanwhile, south of the border, the Dow Jones Industrial Average rose 316.01 points, or 0.9%, to close at 34,137.31, while the S&P 500 gained 38.48 points, or 0.9%, to finish at 4,173.42. The tech-heavy Nasdaq Composite added 163.95 points, or 1.2%, to end the day at 13,950.22.
The rally was fueled by a combination of factors, including news that the U.S. Food and Drug Administration has recommended pausing the use of Johnson & Johnson’s COVID-19 vaccine due to blood clotting concerns. This has led investors to believe that the pandemic is slowly coming under control, paving the way for the economic recovery to continue.
In addition, strong first-quarter earnings reports from major U.S. banks like JPMorgan Chase, Goldman Sachs, and Wells Fargo also contributed to the positive sentiment in the markets. The banks reported significant profits, driven by a surge in trading revenue and a decrease in loan-loss provisions.
Overall, the market rally was a welcome relief for investors who have been grappling with volatility in the past few weeks. It remains to be seen whether the momentum will continue, but for now, investors are cautiously optimistic about the future of the economy.