Stocks rallied on Friday, finishing a second consecutive week of gains and adding to a recovery that has come as investors hope the Federal Reserve might indicate next week that it is preparing to slow down on interest rate increases next week.
The S&P 500 rose 2.5 percent, bringing its gains for the week to 3.95 percent. The benchmark index is down more than 18 percent since the start of the year as interest rate increases and worries about a recession weigh on the markets.
Investors have been closely watching company earnings reports this week for signs of economic headwinds. The biggest technology companies, including Meta, Microsoft, Apple and Alphabet, reported earnings this week, and the results were mostly discouraging.
But on Friday, investors zeroed in on better-than-expected results from Apple. The company reported record sales for the third quarter, and its shares rose 7.6 percent on Friday, even though Apple executives pointed to a slowdown in business at the end of the year.
The company is the largest by market capitalization, which means big gains or losses in its shares can influence indexes like the S&P 500.
Amazon, conversely, tumbled 6.8 percent after it warned that growth would be weak, with estimates for sales at the end of the year that fell far short of Wall Street’s expectations.
Profits at Meta, Facebook’s parent company, declined more than 50 percent compared to one year ago, the company said on Wednesday. After plunging earlier in the week, its shares rose 1.3 percent on Friday.
Next week’s focus will be on the Fed and its efforts to tackle inflation. Central bankers are expected to announce on Wednesday an interest-rate increase of three-quarters of a percentage point. Though Wall Street seems certain of next week’s increase, for investors, the question now is whether the Fed will begin to slow its increases.
Optimism that it might indicate it is prepared to do so has helped fuel the recent gains in shares, though stock investors have built up their hopes on this front before only to see them dashed by the Fed.
Treasury yields also moved higher on Friday, with the 10-year note rising to 4.01 percent while the two-year note moved up to 4.41 percent.
In other markets, the Stoxx 600 rose 0.1 percent and Britain’s FTSE 100 closed with losses of 0.4 percent. Hong Kong’s Hang Seng fell by 3.7 percent and Tokyo’s Nikkei 225 lost 0.9 percent.