EconomyShares of Google, Microsoft and Facebook boost the Nasdaq...

Shares of Google, Microsoft and Facebook boost the Nasdaq 4%

The tech-heavy Nasdaq led Wall Street’s main indexes on Wednesday as upbeat quarterly reports from Microsoft and Alphabet lifted sentiment, coupled with a Federal Reserve rate hike.

Investors were on edge after a profit warning from major US retailer Walmart stoked fears of a further slowdown in spending as high inflation drives up costs for consumers. But the fear dissipated after knowing data from Microsoft and Alphabet, parent company of Google.

Alphabet shares closed up 7.7% at $113.06 as better-than-expected sales of Google search ads brought relief after last week’s warning from social media company Snap had raised fears of a slowdown in the advertising market

Microsoft closed up 6.7% at $268.74, after forecasting revenue to grow at a double-digit percentage rate this fiscal year, thanks to demand for cloud computing services.

Shares of Meta Platforms, which owns Facebook, Instagram and WhatsApp, rose 6.55% to $169.58 before its quarterly report after markets closed, while shares of Amazon rose 5.37% and Apple 3.42%.

With these advances, the Nasdaq managed to close with an advance of 4%; followed by the S&P500, 2.6% and the Dow Jones, which ended the day with a rise of 1.4%.

Optimism about business results was added to the news that the US Federal Reserve raised its benchmark rate 75 basis points to 2.5%. Following the announcement, Fd Chairman Jerome Powell said he did not believe the US economy is currently in a recession, but that it was slowing down.

He also said that the lack of clear visibility on the future of the economy means that the US central bank can provide reliable guidance on the direction of its monetary policy only on a “meeting-by-meeting” basis.

“Powell’s willingness to let the data guide them going forward was something the market liked. He didn’t automatically say we needed another rate hike,” said Peter Tuz, president of Chase Investment Counsel.

“It was a reassuring statement that comes after a day that saw some earnings and revenue that were better than expected, although expectations were very subdued,” he added.

With information from Reuters.

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