By Chuck Mikolajczak
NEW YORK (Reuters) -Global stocks were on pace for their third straight week of gains and seventh consecutive monthly advance on Friday buoyed by strong gains in megacap Amazon after its quarterly earnings, while the dollar climbed after hawkish comments from some Federal Reserve officials.
Amazon surged 9.6% after reporting cloud revenue rose at the fastest clip in nearly three years, enabling the company to forecast quarterly sales above estimates.
Meanwhile, Apple shares edged down 0.4% to $271.37, paring gains after reaching an intraday record of $277.32 after it reported quarterly earnings and forecast holiday-quarter iPhone sales and overall revenue that surpassed 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.
On Wall Street, the Dow Jones Industrial Average <.DJI> closed up 40.75 points, or 0.09%, to 47,562.87, the S&P 500 <.SPX> advanced 17.86 points, or 0.26%, to 6,840.20 and the Nasdaq Composite <.IXIC> climbed 143.81 points, or 0.61%, to 23,724.96.
Stocks closed well off earlier highs, however, as several Fed officials further echoed comments from Chair Jerome Powell earlier in the week, who dented expectations the central bank would cut rates at its December meeting following a 25 basis point cut on Wednesday.
“The theme today is pretty similar to what we saw yesterday. It’s earnings coming in a little better than expected but tempered by a little more hawkish commentary from the Fed,” with James Ragan, Co-CIO and Director of Investment Management Research at D.A. Davidson.
Federal Reserve Bank of Atlanta President Raphael Bostic said a December rate cut is not locked in while Federal Reserve Bank of Cleveland President Beth Hammack said she was open to reforming the interest rate target used by the Fed to implement monetary policy.
Markets are pricing in a 65% chance for a 25 basis point cut at the December meeting, down from almost 92% a week ago, according to CME’s FedWatch Tool.
Each of the three major Wall Street indexes were 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 inched up 0.81 point, or 0.08%, to 1,005.99, and was on track for a seventh straight monthly climb, its longest run since August 2021.
The pan-European STOXX 600 closed down 0.51% 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 but notched its fourth straight month of gains.
In currencies, earlier comments from Fed officials also supported the greenback.
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 0.31% to 99.78, with the euro down 0.31% at $1.1529. The greenback was on pace for a second straight weekly gain and a monthly climb of about 2%.
The Japanese yen edged 0.02% higher against the greenback to 154.10 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 intact.
This week, the Bank of Japan held interest rates steady despite many economists predicting a hike.
The yield on benchmark U.S. 10-year notes rose 0.2 basis point to 4.095% while the 2-year note yield, which typically moves in step with rate expectations for the Fed, slipped 1.6 basis points to 3.598%. The 10-year yield was up nearly 10 basis points on the week, its biggest rise since the week ended April 11 while the 2-year yield was up more than 11 basis points on the week, its biggest rise since the first week of July.
U.S. crude settled up 0.68% to $60.98 a barrel and Brent settled at $65.07 per barrel, up 0.11% on the day.
(Reporting by Chuck Mikolajczak; additional reporting by Sinéad Carew in New York, Marc Jones in London and Stella Qiu in Sydney; Editing by Andrew Heavens, David Holmes, Mark Heinrich, Richard Chang and Chizu Nomiyama )
