By Chuck Mikolajczak
NEW YORK (Reuters) -Global stocks were poised for their third straight week of gains and seventh consecutive monthly advance on Friday as earnings from megacaps Amazon and Apple eased concerns about lofty valuations, while the dollar climbed after comments from some Federal Reserve officials.
Amazon surged more than 10% after reporting cloud revenue rose at the fastest clip in nearly three years, helping the company forecast quarterly sales above estimates.
Apple shares, however, eased 0.3% to $270.52 after reaching an intraday record of $277.32 after it reported quarterly earnings and forecast holiday quarter iPhone sales and overall revenue that surpass Wall Street expectations thanks to strong demand for its iPhone 17 models.
The results cap off a run of earnings this week from several megacap companies, included in the so-called “Magnificent Seven” group of stocks, that made clear the massive build of infrastructure surrounding artificial intelligence shows no signs of abating.
“It was a doozy of a week of earnings, to say the least, so I think that the big takeaways are that the AI narrative is alive and well, there’s strong demand for cloud computing and not enough capacity,” said Jake Seltz, portfolio manager for the Empiric LT Equity team at Allspring in Minneapolis.
“We’ve seen this for multiple quarters now in a row, just looking at the capital spending they’re committing to invest in, building out some of that cloud capacity for AI data centers across the board, we’ve seen it just go up.”
On Wall Street, the Dow Jones Industrial Average <.DJI> rose 75.26 points, or 0.16%, to 47,597.38; the S&P 500 <.SPX> rose 38.30 points, or 0.56%, to 6,860.64; and the Nasdaq Composite <.IXIC> rose 254.26 points, or 1.08%, to 23,835.40.
Each of the three indexes was on track for a third straight weekly gain, while the Nasdaq was set for its seventh straight monthly climb, its longest streak since January 2018.
MSCI’s gauge of stocks across the globe rose 2.56 points, or 0.25%, to 1,007.74, on track for a seventh straight monthly climb, its longest run since August 2021.
The pan-European STOXX 600 index fell 0.53% after a round of mixed quarterly earnings and a benign euro zone inflation report that reinforced the European Central Bank’s view that price pressures remain contained.
This week has also seen the Bank of Japan hold interest rates steady despite many economists predicting a hike.
In currencies, the dollar strengthened after comments from some Fed officials that further dampened expectations the central bank will cut interest rates at its December meeting following comments from Chair Jerome Powell in the wake of its policy announcement that cast doubt on another cut this year.
Kansas City Fed President Jeffrey Schmid said he dissented against cutting interest rates this week out of concern that continued high inflation and signs of price pressures spreading in the economy could raise doubts about the central bank’s commitment to its 2% inflation target.
In addition, Dallas Federal Reserve President Lorie Logan said the Fed should not have cut interest rates this week and should not do so again in December.
The dollar index, which measures the greenback against a basket of currencies, rose 0.3% to 99.77, with the euro down 0.29% at $1.1531. The greenback was on pace for a second straight weekly gain and a monthly climb of 0.8%.
The Japanese yen strengthened 0.08% against the greenback to 153.98 per dollar. Japanese Finance Minister Satsuki Katayama said the government has been monitoring foreign exchange movements with a high sense of urgency after the yen plunged to around 154 per U.S. dollar.
Economic data showed core inflation in Japan’s capital accelerated in October and stayed above the central bank’s 2% target, keeping market expectations for a rate hike from the Bank of Japan (BOJ) intact.
The yield on benchmark U.S. 10-year notes fell 1.2 basis points to 4.081% while the 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 2 basis points to 3.594%.
U.S. crude rose 0.28% to $60.74 a barrel and Brent rose to $65.05 per barrel, up 0.08% on the day.
(Reporting by Chuck Mikolajczak; additional reporting by Marc Jones in London and Stella Qiu in Sydney; Editing by Andrew Heavens, David Holmes and Mark Heinrich)
