IT stocks gain up to 5% as Wall Street indices jump following upbeat retail sales data, investors eye Jerome Powell speech

Top information technology (IT) stocks gained on Friday after major Wall Street indices recorded significant gains following upbeat retail sales data that allayed fears of a recession in the US.

On Thursday, the Nasdaq Composite closed over 2% higher while the S&P 500 and the Dow gained nearly 1.5% after retail sales increased 1% in July, allaying fears of an economic slowdown fueled by a rise in the unemployment rate.

Meanwhile, US consumer prices in the US increased in July in line with expectations, making the case for a rate cut in September. The consumer price index (CPI) rose 0.2% in July and for the 12 months through July, increased 2.9% vis-a-vis a 3% rise in June.

With just a few weeks left before the Federal Reserve’s rate setting meet, the market now expects the central bank to cut rates between 25 to 50 basis points, although majority of the experts indicate the Fed may start cutting rate gradually.

Meanwhile, the Nifty IT index has gained over 11% since the beginning of the year and has risen over 24% in the last one year.

Among the IT pack, Persistent Systems recorded significant year-to-date (YTD) gains of over 32% while Infosys posted over 18% gains in the same period. TCS shares gained nearly 15% during the period. However, Coforge lost over 2% and LTTS lost over 1% in 2024 so far.

Investors are now keenly watching out for Federal Reserve Chair Jerome Powell’s remarks on the economic outlook at the annual Jackson Hole meet in Wyoming next week.