The Dow Increases by 150 Points on Friday as Investors Overcome Concerns About Rising Interest Rates

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Last Updated on November 18, 2022 by Bitfinsider

Friday was a positive day for the market as investors digested the most recent earnings reports and attempted to shake off tougher language from Federal Reserve speakers.

The Dow Jones Industrial Average rose 162 points, or a 0.5% increase. The S&P 500 increased by 0.6%, while the Nasdaq Composite rose by 0.5%.

The S&P and Nasdaq are on track for declines this week, trading 0.5% and 1% lower, respectively. Currently, the Dow is unchanged for the week. However, all three are positive for the month.

The stocks of Ross Stores and Palo Alto Networks increased following the release of their most recent quarterly reports. Investors looked to be pleased with Gap’s latest financial results.

The developments on Friday follow a negative session on Wall Street, during which remarks from Federal Reserve officials fueled concerns about tighter U.S. monetary policy.

James Bullard, president of the Federal Reserve Bank of St. Louis, stated on Thursday that the policy rate is not yet in a sufficiently restrictive range. He argued that the proper range for the federal funds rate may be between 5% and 7%, which is higher than the market’s current pricing.

Adam Crisafulli, founder of Vital Knowledge, stated, “We continue to believe that investors should place a much greater weight on real data than on Fed rhetoric (the former will demonstrate where inflation is headed, while the latter is fixated on where it was).” “However, investors are tired of resisting the Fed’s daily tape bombs, and it may take two or three more CPIs before authorities stop warning the market whenever it attempts to rally.”

In recent weeks, investors have reacted to every new economic data or language that could suggest the Fed’s next move on interest rates. According to Shelby McFadden, financial analyst at Motley Fool Asset Management, the Fed’s views on inflation caused investors to worry the economy has not slowed sufficiently.

Regarding investor response in recent days, she stated, “There has been a clear need for relief and a tug-of-war.” In the end, though, everything hinges on whether this inflationary phase deflates more slowly than it inflated, and on what the Fed decides to do next.

Retail stocks increased in premarket trading on Friday, as more earrings indicate a robust consumer. In early trading, the SPDR S&P Retail ETF (XRT) was up 0.3%, seeking its third gain in four sessions.

XRT is down for the week, but up 2.8% for November and on track for consecutive monthly gains.

In other retail news, Foot Locker jumped 15% in the premarket following earnings that exceeded expectations and an improving outlook. The stock of Ross Stores increased by over 17% as the company’s quarterly revenue and net income surpassed market estimates. Gap gained 8%.

Amazon.com’s premarket value increased 1.3% after Goldman named it a “top holiday pick.”


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