Why is the Block share price skyrocketing today?

The Block Inc (ASX: SQ2) share price is rocketing in morning trade on Thursday.

The global buy now, pay later (BNPL) stock closed yesterday trading for $93.09 per share and is currently trading for $99 per share, up 6.4%.

Here’s what’s piquing ASX investor interest today.

Why is the ASX BNPL share soaring higher?

The Block share price is flying higher today following a 4.4% overnight surge on the tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC).

Block, which acquired Afterpay in January this year, is dual-listed in Australia and the United States. And Block’s shares rocketed 9% on the NYSE yesterday.

The big move higher for tech stocks and the Block share price comes with due thanks to US Federal Reserve chair Jerome Powell.

Tech stocks have been amongst the hardest hit in the latter half of 2022 amid fast-rising interest rates, with the Fed leading the global charge higher.

As most Aussie were sleeping last night, Powell indicated the world’s most influential central bank is likely to slow the pace of interest rate increases as it gauges the impact on its battle against inflation.

According to Powell (courtesy of Bloomberg):

The time for moderating the pace of rate increases may come as soon as the December meeting. Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level.

On the heels of his speech, the Block share price on the NYSE galloped higher.

As for the medium-term outlook, investors should still be prepared for more rate hikes in 2023, just at a potentially slower pace.

“It will take substantially more evidence to give comfort that inflation is actually declining. The truth is that the path ahead for inflation remains highly uncertain,” Powell said.

Commenting on the broader market rally, Dan Eye, a money manager at Fort Pitt Capital Group said (quoted by Bloomberg):

As the market moves into the first quarter of next year, inflation won’t be the same problem as it has been in 2022. We’re likely much closer to the end of this hiking cycle and that should be a tailwind for stocks.

Block share price snapshot

While still down 44% since its first day of trade on 20 January, the Block share price is up 5% over the past month as investors eye the beginning of the end of a series of rapid rate hikes.

The post Why is the Block share price skyrocketing today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block. The Motley Fool Australia has positions in and has recommended Block. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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