Stock Market Today: Dow Racks Up Gains as Chip Rally Powers Tech
2022.05.17 23:23
By Yasin Ebrahim
Investing.com — The Dow racked up gains Tuesday, supported by a chip-led rally in tech as a better-than-expected retail sales data pointing to a strong consumer revived bullish bets on Wall Street.
The Dow Jones Industrial Average gained 1.3%, or 430 points, the S&P 500 rose 2%, and the Nasdaq rallied 2.7%.
Tech climbed more than 2%, led by semiconductors as AMD and Nvidia (NASDAQ:NVDA) racked up gains
Advanced Micro Devices (NASDAQ:AMD) jumped 8% after Piper Sandler upgraded the chipmaker to overweight from neutral following the recent pullback.
Big tech was also in the ascendency, shrugging off a fresh climb higher in Treasury yields following signs of strength in the consumer after U.S. retail sales rose more than expected in April.
The Commerce Department said on Tuesday that retail sales rose 0.9% last month, in line with economists’ forecasts. The retail sales control group – which is filtered into U.S. GDP – rose 1%, well above expectations for a 0.5% rise.
“April retail sales rose solidly and showed no sign that the consumer is cracking under the weight of inflation, higher interest rates or the lack of stimulus payments,” Jefferies said in a note.
The strong economic data arrived just hours before Federal Reserve Chairman Jerome Powell pledged to keep hiking rates until inflation cools.
“We need to see inflation coming down in a convincing way…until we see that, we will keep going [with rate hikes],” Powell said in an interview with the Wall Street Journal. The Fed chief stressed that the U.S. central bank “wouldn’t hesitate” to go beyond the neutral rate — the rate that neither slows or grows the economy — if needed to achieve price stability.
Walmart (NYSE:WMT), meanwhile, kicked off the wave of quarterly reports from retailers, with first-quarter results that fell short on the bottom line, pressured by soaring costs.
The supermarket giant also cut its guidance on second-quarter and full-year growth, sending its shares more than 11% lower.
Home Depot (NYSE:HD) ended up more than 1% after delivering improved guidance following quarterly results that beat on both the top and bottom lines, underpinned by strong demand.
Take-Two Interactive Software (NASDAQ:TTWO) reported mixed quarterly results, and guidance that fell short of estimates, which was driven by the impact of the Ukraine-Russia conflict, but this was “not a surprise and the company noted no material changes to its longer-term projections,” Credit Suisse said in a note. The stock ended up more than 11%.
Citigroup (NYSE:C) surged more than 7% to lead banking stocks higher after Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) took a $3 billion stake in the bank during the first quarter.
JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC) were up more than 3%.
