- Stocks rose on the back of a rally in big tech, with traders looking to the earnings season to see if the excitement surrounding artificial intelligence will justify this year's market advance.
- The S&P 500 reached its highest level since April 2022, while the Nasdaq 100 outperformed ahead of Microsoft and Alphabet's earnings. The Dow Jones Industrial Average advanced for the 12th time in a row, the longest winning streak in over six years. Consumer confidence data on the eve of the Federal Reserve decision bolstered the soft-landing narrative while implying policymakers aren't done fighting inflation yet. In late trading, Google’s parent Alphabet gained while software giant Microsoft dropped after reporting quarterly results.
- With the S&P 500 less than 5% from its all-time high, elevated bullish positioning, and indicators indicating overbought levels, many investors are waiting for earnings to decide where to go from here. This is especially true in big tech, with the Nasdaq 100 continuing to rise despite a $5 trillion rally that has raised concerns about overstretched valuations.
- Treasury two-year yields fell four basis points to 4.88%, making them more sensitive to upcoming Fed moves. The dollar reversed a five-day gain. Swap rates continued to price in a quarter-point Fed hike on Wednesday, with an additional 12.5 basis point increase expected by year's end. That implies a 50% chance of another quarter-point move.
- In other corporate news, Banc of California rose on news that it is in advanced talks to acquire PacWest Bancorp, which dropped. General Electric and 3M both rose after reporting earnings that exceeded Wall Street's expectations. IRobot fell after Amazon.com Inc. said it would pay less for the Roomba maker.
