S&P 500 reverses initial decline and trades above 4,500

• The S&P 500 reversed an initial 4,450 to trade above 4,500, up 1.0%.
• Investors digested strong Amazon earnings a day after Facebook’s horror show and a strong US jobs report.

Trading was choppy towards the start of the US session as investors weighed the implications of the latest much stronger-than-expected US labor market gains on the prospects for policy. the Fed and interest rates. The S&P 500 it was at one point lost 0.5% to test the 4,450 level, but has since seen a 70 point rally to trade at the 4,520 zone, now almost 1.0% higher on the day. The index, despite pulling back sharply from near highs of 4,600 on Wednesday on the back of nasty gains from Meta Platforms, looks poised to close the week up roughly 2.3% gains.

Support on the last trading day of the week was a more than 15.0% rally in Amazon’s share price, fueling a broader rally in the tech sector. Amazon will increase the price of its US Prime subscription to offset higher costs, the company announced in its latest earnings report. The S&P 500 GICS Consumer Discretionary Index to which Amazon belongs rallied nearly 5.0%, while the big tech-dominated information technology and communication services indices also rose about 1.0% each. Strong earnings from Snapchat and Pinterest sent their shares up 60% and 12% respectively, adding to tailwinds in the broader tech sector.

Next week, earnings will still be in the spotlight, although most mega-cap stocks have already reported. Otherwise, the focus will remain on the macro picture, with US consumer price inflation data scheduled for release on Wednesday. The Fed has explicitly said that any “worsening” of the inflation problem could cause them to act more aggressively, so any surprise to the upside is likely to make markets price in a greater chance of the bank raising rates by 50%. bp in March.

Technical levels