Stocks Edge Up on Amazon Boost; Dollar Rises After Fed Comments

Stocks Edge Up on Amazon Boost; Dollar Rises After Fed Comments
Investors weigh mixed economic signals as tech gains offset bond market jitters

NEW YORK — U.S. stocks inched higher on Friday, lifted by a strong performance from Amazon.com and other major technology shares, while the U.S. dollar strengthened after Federal Reserve officials hinted that interest rates could stay elevated longer than markets had anticipated.

The S&P 500 rose 0.3%, while the Dow Jones Industrial Average added 85 points, or 0.2%. The Nasdaq Compositeled the day’s gains, climbing 0.5%, driven by a 4% surge in Amazon’s stock following a bullish earnings forecast and robust sales in its cloud computing and advertising divisions.

“Amazon’s results gave investors a reason to stay optimistic about corporate earnings even as broader economic uncertainty persists,” said Emily Roland, co-chief investment strategist at John Hancock Investment Management.

Meanwhile, the U.S. dollar index advanced 0.4% to its highest level in two weeks, reflecting investor confidence that the Fed may hold interest rates higher through early 2026. Treasury yields also rose, with the 10-year note climbing to 4.61%, its highest since early September.

Fed Comments Signal Caution

The moves followed remarks from Federal Reserve Vice Chair Philip Jefferson, who said the central bank is “not yet convinced inflation is on a sustainable path back to 2%,” suggesting policymakers may hold off on cutting rates despite signs of economic cooling.

“It’s too early to declare victory over inflation,” Jefferson said in prepared remarks at a conference in Boston. “We’re encouraged by recent data, but we must remain vigilant.”

His comments tempered hopes that the Fed would begin reducing rates early next year, pushing the two-year Treasury yield up to 4.97% as traders priced in fewer rate cuts in 2026.

Investors are watching closely for next week’s consumer price index (CPI) report, which could offer fresh clues about inflation pressures.

Tech and Retail Stocks Provide Cushion

Beyond Amazon, other big tech names posted modest gains. Apple rose 0.6%, Microsoft edged up 0.4%, and Nvidiaadded 1.1% after analysts at Goldman Sachs raised their price target on the chipmaker, citing continued AI demand.

Retailers also saw movement following mixed economic data. Costco shares advanced 2.3% after posting stronger-than-expected September sales, while Target slipped 1.4% on concerns that consumer demand may be softening amid higher prices and tighter credit.

“Households are showing some fatigue, but corporate earnings in the consumer sector have been surprisingly resilient,” said Megan Greene, global chief economist at Kroll.

Dollar Strength Highlights Divergence

The dollar’s rise reflected renewed divergence between U.S. monetary policy and that of major trading partners. The eurofell to $1.06 after European Central Bank officials signaled they could consider rate cuts by mid-2026 amid stagnant growth across the eurozone.

In Asia, the Japanese yen weakened to 149.8 per dollar, prompting speculation of possible intervention by Tokyo to support the currency.

“The U.S. is still the growth and yield story,” said George Goncalves, head of macro strategy at MUFG Securities. “Until the Fed signals real policy easing, the dollar will remain firm.”

Oil and Gold Ease

Energy markets retreated as oil traders reacted to reports of rising U.S. inventories and fading fears of supply disruptions. Brent crude fell 0.8% to $84.10 per barrel, while West Texas Intermediate slid 0.9% to $80.20.

Gold prices dipped 0.3% to $2,326 an ounce, weighed down by the stronger dollar and higher bond yields.

Market Outlook: A Balancing Act

Despite the day’s modest gains, analysts say investors remain cautious heading into the fourth quarter, with markets balancing optimism about corporate profits against concerns that higher interest rates could slow growth further.

“We’re in a phase of digestion,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “The market isn’t falling apart, but it’s also not convinced the Fed is done tightening.”

The S&P 500 remains up roughly 11% year-to-date, buoyed by strength in technology and energy shares, even as small caps and interest-rate-sensitive sectors lag.

As the Fed’s next policy meeting approaches, traders will continue parsing economic data and central bank signals for signs of what comes next, whether that means a “soft landing” or renewed turbulence.