Wall Street’s rally marks the first weekly winning streak since the summer

NEW YORK – Technology stocks led a broad rally on Wall Street on Friday, capping another strong week for the market as investors welcomed solid earnings from Apple and other companies.

The S&P 500 rose 2.5% and posted its first consecutive weekly gains since August. The Dow Jones Industrial Average rose 2.6% and the Nasdaq technology composite rose 2.9%. Shares of smaller companies also rose, lifting the Russell 2000 by 2.3%.

Apple’s latest quarterly results showed the iPhone maker made even bigger summer profits than expected. Its shares rose 7.6% and led a rally in tech stocks that had largely been beaten a day earlier.

Intel jumped 10.7 percent after delivering a much bigger profit than analysts had expected, even as it said it saw “deteriorating economic conditions.”

Gilead Sciences jumped 12.9% and T-Mobile US gained 7.4% after they also beat Wall Street profit expectations.

Investors were also encouraged by the consumer spending report, which came a day after new data showed the economy grew modestly in the third quarter and inflation eased.

“You have an economy that almost refuses to turn over, an economy that is fundamentally resilient, but at the same time inflation is coming down, and that’s what the Fed wants and that’s obviously what the market wants,” said Quincy Crosby, ch. equity strategist for LPL Financial.

That fueled Wall Street’s hopes of a “pivot” from the Federal Reserve, where the central bank is scaling back the big rate hikes that have roiled the market. Such a move could boost the market, although many analysts say such hopes may be overblown.

The central bank has been very clear about its plan to err on the side of going too far to tame inflation, meaning big gains on hopes of a pullback look premature, said Liz Young, chief investment strategist at SoFi.

“This rally has now become a bit irrational and fragile at this level,” Young said.

The S&P 500 rose 93.76 points to 3,901.06. The Dow gained 828.52 points to 32,861.80. The Nasdaq rose 309.78 points to 11,102.45. The Russell 2000 gained 40.60 points to 1,846.92.

Many major U.S. companies reported higher-than-expected earnings, though the bag remains decidedly mixed.

Friday’s solid earnings helped offset a 6.8 percent drop for Amazon, which offered a weaker-than-expected forecast for earnings ahead. It was the latest major tech company to take a beating this week after reporting some discouraging trends. It’s a sharp turnaround after the group dominated Wall Street for years with seemingly unstoppable growth.

Earlier in the week, Meta Platforms lost nearly a quarter of its value after reporting a second straight quarter of revenue decline amid declining ad sales and stiff competition from TikTok. Microsoft and Google’s parent company also reported delays in key areas.

Such issues created a sharp divide on Wall Street this week between Big Tech laggards and the rest of the market. The Nasdaq, which is loaded with high-growth tech stocks, rose 2.2% this week. It would have fared even worse if not for Apple’s push on Friday. The Dow, meanwhile, jumped 5.7% for the week as there was less emphasis on technology.

Rising interest rates have hit Big Tech stock prices harder than the rest of the market, and the pressure increased on Friday as yields climbed.

“The markets still don’t seem to want to believe that we could be in a place where an earnings recession is possible,” Young said.

Data released this morning showed that wage increases and other compensation for US workers over the summer were in line with economists’ expectations. That should keep the Fed on track to continue raising rates sharply in hopes of weakening the labor market enough to tame the nation’s high inflation. Other data showed the Fed’s preferred gauge of inflation remained very high and US households continued to spend more in the face of that.

The Fed tries to contain inflation through the purchases made by households and businesses necessary to keep it high. It does this by deliberately slowing down the economy and the labor market. The worry is that it could go too far and trigger a sharp decline.

The Federal Reserve has already raised its benchmark overnight interest rate to a range of 3% to 3.25% from near zero in March. It is widely expected to push through another hike next week, triple the usual size, before potentially making a smaller increase in December. Higher interest rates not only slow the economy, but also hurt stock prices and other investments.

The yield on two-year Treasuries, which tends to track expectations for Fed action, rose to 4.42 percent from 4.28 percent late Thursday.

The 10-year yield, which helps determine rates on mortgages and many other loans, rose to 4.01 percent from 3.93 percent.

Twitter shares ended trading after Elon Musk took control of the company following a lengthy legal battle.

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Associated Press writers Elaine Kurtenbach, Matt Ott and Marie Yamaguchi contributed.

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