Stock Market Today (7/27/22): Tech Earnings, Fed Hike Light Fire Under Stocks – Kiplinger’s Personal Finance

Wednesday was a busy, but successful, day for stocks, with today’s upside fueled by a well-received round of earnings and the latest Fed policy update.

There was no shortage of corporate updates for investors to sift through, but last night’s results from Big Tech titans Alphabet (GOOGL, +7.6%) and Microsoft (MSFT, +6.7%) drew the most attention. 

While Alphabet missed on both the top and bottom lines, the company did see strong growth in Google Search revenue thanks to travel and retail searches. Microsoft’s fiscal fourth-quarter results also came up short, but it expects double-digit revenue and operating income growth in fiscal 2023 (on a currency adjusted basis). Both firms reported their slowest revenue growth since 2020, and pointed to a stronger dollar as a significant headwind.

Also in focus today was the Federal Reserve, which, as expected, raised interest rates by 75 basis points (a basis point is one-one hundredth of a percentage point).

“With some softening of recent economic data, Fed officials likely didn’t feel the pressure to go beyond market consensus with regards to the level of rate change in the policy rate,” says Charlie Ripley, senior investment strategist at Allianz Investment Management. He adds that there is plenty of time between now and the Fed’s September meeting for the central bank to see if policy changes that have already been made are working. Overall, there were no surprises in today’s meeting, and what happened this afternoon ultimately leaves the central bank’s options open this fall, he says.

Sign up for Kiplinger’s FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

Stocks were solidly higher heading into the mid-afternoon central bank announcement, but skyrocketed following it. The Dow Jones Industrial Average jumped 1.4% to 32,197 and the S&P 500 Index soared 2.6% to 4,023. The Nasdaq Composite, meanwhile, spiked 4.1% to 12,032, its best day since April 2020.

Other news in the stock market today:

  • The small-cap Russell 2000 rose 2.4% to 1,848.
  • U.S. crude futures advanced 2.4% to settle at $97.26 per barrel.
  • Gold futures eked out a marginal gain to end at $1,719.10 an ounce.
  • Bitcoin enjoyed an 8.9% boost to $22,769.69. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
  • Chipotle Mexican Grill (CMG) rallied 14.7% after the burrito chain reported second-quarter earnings of $9.30 per share, more than analysts were expecting. And while revenue was up 17% year-over-year for the three-month period, it came in just below the consensus estimate. CMG also said it will raise prices again in August ot counter inflation. “We believe that Chipotle has a healthy balance …….


Leave a Reply

Your email address will not be published.