Markets Jump on the Day and Week on Rate Optimism

Table showing the performance of major U.S. financial indexes on March 3, 2023


Key Takeaways

  • U.S. equities indexes moved higher on March 3 and recorded gains for the week on hopes for moderation in the Fed's interest rate-hiking cycle.
  • The optimism on rates benefited shares of companies that are sensitive to borrowing costs and sank the 10-year Treasury yield back below 4%.
  • Boosted by Friday's gains, all three major indexes ended the week higher, with the Nasdaq jumping 2.6%, the S&P 500 rising 1.9%, and the Dow up 1.8% on the week.

U.S. equities closed out the day and week with strong gains on optimism the Fed could ease back on interest rate hikes designed to fight inflation. That sent the stock market higher and bond yields tumbling, with the rate on the 10-year Treasury note sinking back below 4%. For the week, the Dow was up 1.8%, the S&P 500 added 1.90%, and the Nasdaq soared 2.6%.

Stocks which become more attractive when borrowing costs fall helped lead the gains. Shares of Apple (AAPL), Alphabet (GOOGL), Amazon (AMZN), and Microsoft (MSFT) advanced. Shares of D.R. Horton (DHI) and rival home builders moved higher. Shares of American Express (AXP), Visa (V), and other credit card providers climbed.

Meta Platforms (META) cut prices for its virtual reality (VR) headsets, and shares jumped. It was a big day for investors of the Big Three automakers along with Tesla (TSLA), as their shares rose. Cooper Companies (COO) was the best-performing stock in the S&P 500 as the medical device company posted better-than-expected earnings and revenue.

Only four stocks in the S&P 500 dipped 1% or more. Among them was Hormel Foods (HRL), with shares falling in their ninth-straight losing session as the maker of Spam, corned beef hash, and other foods deals with inflation and supply-chain issues that are hurting profits and sales. Inflation also affected consumer spending at Costco (COST). The warehouse retailer missed revenue estimates, and shares dropped. Shares of Lumen Technologies (LUMN) sank on word that the telecom firm may face a shareholder lawsuit. Shares of Hewlett Packard Enterprise (HPE) declined following release of the information technology company's earnings report.

Oil futures were up 2%. Gold futures increased 1%. The U.S. dollar tumbled against the euro, pound, and yen. The fallout over the troubles facing crypto bank Silvergate Capital (SI) sent prices for major digital coins lower.

Table showing the S&P 500 stocks with the biggest gains and losses on March 3, 2023


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