Stocks Rally on Friday to Finish the Week and a Volatile Quarter on a Positive Note

Stocks rallied this week, ending the first quarter on a high note despite the bank turmoil and looming questions about the global economy.

At the closing bell, the S&P 500 led gains, rising 3.48% week-over-week (+7.03% year-to-date). The Dow Jones Industrial Average was up 3.22% (+0.32% YTD). The Nasdaq Composite soared 3.37% and recorded an impressive 16.77% quarterly gain, marking its best quarter since 2020.

The strength in tech stocks was the key driver of the market's overall performance this quarter. The sector outperformed all other S&P sectors, posting a remarkable gain of 21.49%. This surge helped offset weakness in the banking sector, which was the worst-performing sector in Q1, down 6.05%.

European indexes were not left behind. The MSCI EMU jumped 4.36% over the week (up 11.94% for the year) while the FTSE added 3.06%, bringing its YTD performance to +2.42%.

In Asia, Japan’s Nikkei rose 2.40% (+7.46% YTD) while the Shanghai Composite edged up 0.22% (+5.94% YTD). The Korea Stock Exchange Composite (KOSPI) did better, up 2.56% (+10.75% YTD). The benchmark Indian stock market index (NIFTY 50) gained 2.45% over the week but remained in negative territory over the year (-4.12%).

The 11 sectors of the S&P 500 trade in the green

In a rare display of broad-based strength, all the 11 S&P 500 sector indexes closed higher this week, for the first time in 2023. The energy sector led the way with a notable gain of 6.17%, driven by a surge in WTI oil prices, which rose 9.25% week-over-week to reach $75.7/bbl. The OPEC+ unexpectedly announced on Sunday further oil output cuts of around 1.15 million barrels per day. This was a significant rebound from mid-March, when prices had dipped to their lowest level since November 2021, falling below $67/bbl.

The consumer discretionary sector was another standout performer, posting gains of 5.58% for the week. This impressive showing was largely due to the strong performance of Tesla stocks (TSLA), which climbed 8.95% over the week and an impressive 68.42% year-to-date. Amazon.com (AMZN) also contributed to the sector's success, rising 5.26% on the week and 22.96% year-to-date.

The real estate sector also saw gains of 5.16%, after having experienced a tough period (seven weeks) during which it lost 13.30% in value. Meanwhile, communication services lagged behind, posting the weakest gains of the week at just 1.46%. The sector was weighed down by Alphabet stocks (GOOG), which fell 1.94% over the week.