U.S. equities and stock exchange traded funds climbed Friday, with the S&P 500 hitting intra-day record highs, as weakening economic data diminished bets of further rate hikes this year.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEARCA:SPY), iShares Core S&P 500 ETF (NYSEARCA:IVV) and Vanguard 500 Index (NYSEARCA:VOO), were 0.4% higher Friday.
Technology companies in the S&P 500 led markets, rising 0.8%. However, lackluster banks capped broad market gains, with financial companies in the S&P 500 falling 0.8%.
“The bar for earnings is higher this time around, especially after the phenomenal growth we saw in the first quarter. So companies that miss expectations or guide down will be overly punished,” Michael Scanlon, portfolio manager at Manulife Asset Management, told Reuters.
According to Thomson Reuters, analysts project second quarter earnings for the S&P 500 companies to rise 8.1% year-over-year after first quarter earnings posted their best result since 2011. Traders will be closely monitoring quarterly earnings as a gauge to see whether or not the high-flying valuations are justified in light of tepid inflation and mixed economic data.