A shopper carries an Apple bag in New York on Oct. 28.
(Bloomberg) — A record-smashing rally in megacap high-fliers has shown no signs of stopping as blowout earnings readouts from technology heavyweights including Amazon.com Inc. and Apple Inc. defied warnings of a tech bubble.
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The Magnificent Seven Index posted its seventh consecutive monthly gain, a streak that was exceeded just once ever. The S&P 500 Index rose 0.3% in New York, with the US benchmark notching its sixth-straight month of gains after soaring nearly 40% from its April nadir in one of the fastest recoveries in stock market history. The tech-heavy Nasdaq 100 Index rose 0.5%.
Amazon shares surged after its cloud unit posted the strongest growth rate in almost three years. Apple projected a jump in sales over the holiday season after releasing new iPhones, helping to assure investors that its flagship product remains a growth engine, though shares ended Friday lower.
“It’s Big Tech that keeps the stock market going, so if that group starts to go down, the whole market starts to go down,” said Matt Maley, chief strategist at Miller Tabak & Co. “Big-Tech earnings gave people a lot of relief. Going into this earnings season people were quite concerned about what the results would look like, especially after the recent record-smashing advance.”
Positive developments on the trade front also lifted sentiment, with President Donald Trump touting that the US and China had “settled” their differences on access to China’s rare earths after a meeting with Chinese President Xi Jinping.
Despite upbeat signals from tariff negotiations and technology earnings, investors still face a murky economic outlook after the Federal Reserve earlier this week pushed back on the prospect of further interest-rate reductions, with the US in a data blackout because of the government shutdown.
Three policymakers said they did not support a decision to ease monetary policy. Kansas City Fed President Jeff Schmid said he voted against the US central bank’s decision this week because he’s concerned that economic growth and investment will put upward pressure on inflation. His Dallas counterpart Lorie Logan as well as Cleveland’s Fed President Beth Hammack also said they would have preferred to hold rates steady.
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