The S&P 500 Index rose for the first time in four days, with all 11 sectors gaining. While the broad benchmark remained down on the week, the biggest one-day gain in the tech-heavy Nasdaq 100 since November pushed it into the green for the period.
Google parent Alphabet gained after revealing a plan to cut 12,000 jobs. Netflix surged after reporting stronger-than-expected subscriber numbers.
Benchmarks climbed to session highs on Friday after Fed governor Christopher Waller said the policy looks pretty close to be sufficiently restrictive and he backed moderation in the size of rate increases.
Earlier, Philadelphia Fed president Patrick Harker repeated his view for more incremental steps in rate hikes, while Kansas City Fed chief Esther George said the economy can avoid a sharp downturn.
Equity markets rallied despite a push higher in Treasury yields, suggesting that the 60/40 portfolio model could be making a comeback.
Earlier this week, higher rates and hawkish comments from Fed and European Central Bank officials weighed on risk sentiment.
“It’s notable that yields are up today, yet Nasdaq is outperforming,” said Jonathan Krinsky, chief market technician for BTIG.
“While this could be perceived as a short-term positive, if we are shifting to a ‘bad news is bad’ narrative where lower rates coincide with lower stocks, then it would make sense to see the inverse.”
Earnings have also been in focus. Of the 55 S&P 500 companies that have reported results so far, about two-thirds have beaten analysts’ estimates, compared with the 80 per cent positive surprise seen over the past several quarters.
“Fears of a recession seemed to be overriding a sort of optimism from some companies which have reported better-than-expected results,” said Fiona Cincotta, senior financial markets analyst at City Index.
“There is this understanding that earnings are probably going to be weaker, but I think a lot of that’s being priced in.”
Oil rallied to the highest since mid-November, capping off its second straight week of gains on optimism over increased demand from China.
West Texas Intermediate rose to settle above $81 a barrel, posting a 1.8 per cent weekly gain.