U.S. stocks ended a turbulent week with a sizable gain as Apple Inc.’s earnings report buoyed technology shares and a smattering of economic data suggested a modicum of progress is being made in the Federal Reserve’s battle against inflation.

The S&P 500 and the tech-heavy Nasdaq 100 notched their longest weekly rising streaks since August. Gains in big-tech companies including Microsoft Corp. and Google parent Alphabet Inc. helped both indexes snap a two-day decline. 

Treasuries turned weaker on Friday, breaking a three-day rally after hopes of a Fed pivot fizzled. The dollar rose for the second straight session. 

Stocks, bonds and the dollar whipsawed this week as investors attempted to make sense of conflicting earnings reports and economic data. 

Quarterly reports from megacap technology firms underscored the impact of the Fed’s tightening regime, and consequently the surging dollar. But overall, earnings still largely beat estimates, with Caterpillar Inc., which is considered a bellwether firm, highlighting strong buyer demand. 

Meanwhile, a core gauge of U.S. inflation accelerated in September, bolstering the Fed’s case for another jumbo rate hike next week. But a contraction in manufacturing and services, and lower-than-expected U.S. home sales, indicated that the Fed’s actions are already hitting the economy. Gross domestic product data, which came in on Thursday, briefly assuaged concerns of an imminent recession.

Economists are still expecting the Fed to raise rates by three-quarters of a percentage point for the fourth time in a row next week. Rates are projected to rise another half point in December, then by quarter points the following two meetings.

“It is too early to expect the Fed to signal a more dovish stance,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “We maintain our view for economic growth to bottom out in the middle of 2023 and for the Fed to stop hiking in 1Q23.” 

BEYOND THE U.S.

US investors also closely watched the actions of other central banks. 

While the European Central Bank delivered a second straight 75 basis-point hike on Thursday, it dropped a prior reference to rate increases continuing for “several meetings,” an outcome that was considered dovish. On Wednesday, the Bank of Canada announced a smaller-than-expected rate hike, which briefly stoked speculation that the Fed could follow suit. 

The Bank of Japan, meanwhile, stood by its ultra-low interest rates at the end of a two-day long policy meeting on Friday.

Some of the main moves in markets:

Stocks

• The S&P 500 rose 2.5 per cent as of 4 p.m. New York time
• The Nasdaq 100 rose 3.2 per cent
• The Dow Jones Industrial Average rose 2.6 per cent
• The MSCI World index fell 0.3 per cent

Currencies

• The Bloomberg Dollar Spot Index rose 0.2 per cent
• The euro was little changed at US$0.9965
• The British pound rose 0.4 per cent to US$1.1617
• The Japanese yen fell 0.8 per cent to 147.44 per dollar

Cryptocurrencies

• Bitcoin rose 1.1 per cent to US$20,620.71
• Ether rose 2 per cent to US$1,558.63

Bonds

• The yield on 10-year Treasuries advanced seven basis points to 3.99 per cent
• Germany’s 10-year yield advanced 14 basis points to 2.10 per cent
• Britain’s 10-year yield advanced eight basis points to 3.48 per cent

Commodities

• West Texas Intermediate crude fell 1.1 per cent to US$88.13 a barrel
• Gold futures fell 1 per cent to US$1,648.40 an ounce