Investing.com -- The S&P 500 pared some gains Friday as rising Treasury yields kept a lid on gains in tech after Federal Reserve chairman Jerome Powell signaled there was still more work to do to curb inflation.
The S&P 500 rose 0.4% higher, the Dow Jones Industrial Average gained 0.6%, 208 points, Nasdaq was up 0.4%.
Powell leans hawkish to push Treasury yields higher
In his Jackson Hole speech Friday, Powell said “restrictive” monetary policy is called for to achieve the Fed’s 2% inflation target.
Bringing inflation back to target is expected to “require a period of below trend economic growth as well as some softening and labor market conditions,” the Fed chief added.
Treasury yields surged in anticipation of a higher-for-longer rate regime, with the 2-year Treasury yield briefly rising close to the cycle highs of 5.12%.
Tech gives up some gains after Treasury yields jump
Tech came under pressure from rising Treasury yields, which makes growth sectors like tech with higher valuations less attractive, with Google (NASDAQ:GOOGL) and Meta (NASDAQ:META) driving downside momentum.
Marvell Technology Inc (NASDAQ:MRVL) fell 7%, weighing on chip stocks despite reporting quarterly results that topped Wall Street estimates as investors weighed the chipmaker’s foray into AI-centric products against a downbeat outlook on memory demand.
“We see Marvell's cautious commentary on storage (e.g., a slower than expected recovery) as paralleling our conversations regarding continued soft CSP (LON:CSPC) spend on standard servers and the resulting headwinds for NAND/SSD and HDD demand,” Wedbush said in a note.
NVIDIA Corporation (NASDAQ:NVDA), meanwhile, was also a drag on broader tech as investors appear to take some profit on the chipmaker, which has racked up a gain of more than 220% this year, following its recent quarterly results that surprised to the upside.
Gap shrugs off weaker guidance, Ulta Beauty slumps despite beat and raise quarter
Gap (NYSE:GPS) rose more than 6%, shrugging off mixed-quarterly results that included weaker second-quarter revenue and third-quarter guidance after falling a cautious outlook on the consumer.
Ulta Beauty Inc (NASDAQ:ULTA), meanwhile, fell more than 3% despite lifting its annual guidance and delivering quarterly results that beat on the top and bottom lines as some question whether robust demand for beauty products is likely to continue amid a weakening consumer.
While the “stellar” demand for beauty products seen in the first of the year is set to moderate, UBS says, Ulta Beauty will be “structurally better positioned over the long-term due to its supply chain, operational investments, and more profitable e-commerce business.