US Markets Rise on Fed Expectations and Earnings

Table showing the performance of major U.S. equities indexes on Jan. 23, 2023


Key Takeaways

  • U.S. markets kicked off the week with a positive day on Jan. 23, driven by expectations of slower interest rate hikes ahead and optimism around earnings.
  • The Nasdaq was up by more than 2% on the day, while the S&P 500 and the Dow posted gains in excess of 1% and 0.75%, respectively.
  • Tech stocks contributed to the strong performance, while shares of oilfield services companies dropped following an earnings miss by Baker Hughes (BKR).

U.S. equities started the new week in the green, fueled by optimism that the Federal Reserve may be preparing to slow its interest rate hikes and as earnings season gets set to move into high gear.

Tech stocks helped drive the advance. Salesforce (CRM) shares jumped as activist investor Elliott Management took a multi-billion dollar position in the cloud-based software firm. Shares of Apple (AAPL) climbed when India's commerce and industry minister said the company wants to significantly increase iPhone production in India. Microsoft (MSFT) shares rose as the software giant invested a reported $10 billion in ChatGPT maker OpenAI. Tesla (TSLA) shares jumped after CEO Elon Musk told a court he believed he did have the funding to take the electric carmaker private in 2018.

Semiconductor company shares soared, led by Advanced Micro Devices (AMD) after Barclays upgraded the stock and boosted its price target. It was followed by Western Digital Corporation (WDC), as shares jumped on a report that the company is in talks to merge with Japan's Kioxia. Spotify (SPOT) became the latest big tech company to announce job cuts, and its shares gained. Newell Brands (NWL) shares advanced after the consumer products maker also cut jobs as part of a larger restructuring.

Oil Patch Earnings

Shares of Baker Hughes (BKR) dropped as the oilfield services provider missed earnings estimates. Shares of Schlumberger (SLB) and Halliburton (HAL) fell as well. Xylem (XYL) shares plunged 8% after the water technology company said that it was paying $7.5 billion to purchase rival Evoqua Water Technologies (AQUA). Evoqua shares soared 15%. Shares of Synchrony Financial (SYF) lost ground as the bank raised its provision for credit losses. An analyst downgrade sent American Tower (AMT) shares lower.

Oil futures were flat. Gold prices reversed earlier losses and ended higher. The yield on the 10-year Treasury note rose. The U.S. dollar was up versus the pound and yen, but fell against the euro. It was a mixed trading session for major cryptocurrencies.

Table showing the stocks on the S&P 500 with the biggest gains and losses on Jan. 23, 2023


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