Indices Jump on Inflation Data; Nasdaq records best quarter since 2020 ft

NEW YORK, March 31 (Reuters) – Wall Street rallied more than 1% on Friday and the Nasdaq posted its biggest quarterly percentage gain since June 2020, as signs of cooling inflation bolstered hopes that the Fed Federal will soon end its aggressive interest rate hikes.

The S&P 500 closed at its highest level since February 15 and posted a second straight quarter of gains, led by the 21.5% rise in the technology sector (.SPLRCT) in the first quarter.

The quarterly gains came despite a sharp sell-off in bank shares following the collapse of two regional banks earlier this month and concerns about a possible larger financial crisis.

The S&P 500 Financials (.SPSY) sector was the worst-performing sector of the quarter, posting a 6.1% drop, while the KBW Regional Banks Index (.KRX) fell 18.6% over the period.

The Commerce Department report on Friday showed that US consumer spending rose moderately in February, while inflation cooled.

“The stock market seems to be delighted by the slight drop in inflation, as it should be. It underscores that the Fed’s campaign is indeed working, albeit slowly,” said Quincy Krosby, chief global strategist at LPL Financial in Charlotte. . , North Carolina.

The Fed has been raising rates to cool inflation. Expectations for a 25 basis point rate increase at their May meeting fell to around 50%, and the increase is not seen to be all that likely.

The Dow Jones Industrial Average (.DJI) rose 415.12 points, or 1.26%, to 33,274.15, the S&P 500 (.SPX) gained 58.48 points, or 1.44%, to 4,109, 31 and the Nasdaq Composite (.IXIC) added 208.44 points, or 1.74%, to 12,221.91.

For the week and month, shares also posted strong gains. The Nasdaq rose 6.7% in March.

For the quarter, the Nasdaq jumped 16.8% in its biggest quarterly percentage gain since the three months ending June 2020. The S&P 500 gained 7% and the Dow rose 0.4% in the quarter, according to the latest data available.

Semiconductors were among the best performing stocks of the quarter, with the Philadelphia Semiconductor Index (.SOX) rising 27.6%.

Shares of big tech rose as investors left the banks and US Treasury yields fell. The yield on two-year bonds posted its biggest monthly drop since 2008 on Friday. Higher yields tend to be negative for big tech companies.

Shares of Apple Inc (AAPL.O) finished up 1.6% on Friday, rising along with other megacaps. It also won its appeal against a decision by Britain’s antitrust regulator to launch an investigation into its mobile browser and cloud gaming services.

Also on Friday, Boston Fed President Susan Collins said that wherever the US central bank stops with its rate hikes, holding that level for some time will be critical to help reduce the high inflation to the target of 2%.

Volume on US exchanges was 11.98 billion shares, compared with the full session average of 12.74 billion over the past 20 trading days.

Issues going up outnumbered going down on the New York Stock Exchange by a ratio of 4.78 to 1; on Nasdaq, a 2.45-to-1 ratio favored advancers.

The S&P 500 posted 19 new 52-week highs and no new lows; the Nasdaq Composite posted 81 new highs and 131 new lows.

Reporting by Caroline Valetkevitch; Additional reporting by Amruta Khandekar and Ankika Biswas; Additional reporting by Johann M Cherian Editing by Vinay Dwivedi, Maju Samuel and Richard Chang

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