Technology shares continued to rise Friday, pushing the S&P 500 further into bull-market territory as the dollar headed for its biggest weekly loss in two months on bets the Federal Reserve is nearing the end of its hiking cycle.
The S&P 500 rose 0.5%, as tech shares drove another session of gains with Tesla up 5.6% after General Motors announced it’s joining the company’s charging network.
Netflix rose 2.2% after a report the streaming service provider added U.S. subscribers after cracking down on password sharing.
And Adobe gained another 5.4% on plans for a new AI subscription with copyright services.
The S&P 500 has now surpassed a 20% gain from an October low, a common marker of a bull market, after recent gains in technology stocks.
However, analysts have warned the rally could stall ahead of next week’s interest-rate decisions from the Fed and the European Central Bank.
Unexpected hikes from two central banks this week have raised speculation that policymakers may have to keep rates higher for longer.
Meanwhile, U.S. data pointing to a cooling labor market has supported the consensus view that the Fed is likely to pause.
“We’ve become a little uncomfortable with the tech trade,” Stuart Kaiser, head of U.S. equity trading strategy at Citigroup, told Bloomberg TV. “There’s a scarcity of growth in the market, and the market is willing to pay a premium for that scarcity of growth.”
But the debate for investors is what can get the market rally to turn “into something that is maybe a little more durable and sustainable to the upside.”
Treasury yields rose after disappointing employment data from Canada and ahead of U.S. coupon sales.
Canada’s economy ended its eight-month run of employment gains with minor job losses in May, mostly concentrated among youth and self-employed people.
Currently, swaps traders are pricing in roughly a one-third chance of a Fed hike next week, and almost 90% odds of one in July, after an unexpected rate hike by the central banks of Canada and Australia this week.
In Europe, stocks were little changed after a downbeat outlook from Croda International weighed on chemical shares.
Japan’s Nikkei 225 capped a ninth week of gains, up 2.4%, for its longest streak in more than five years.
And in currencies, the Turkish lira extended its decline to an all-time low against the dollar, taking its weekly drop to 10%.
President Recep Tayyip Erdogan completed key appointments of the economy team, which is expected to turn to more conventional policies.
