Stocks ended sharply higher Friday, with the Nasdaq posting an impressive gain, despite another disappointing series of earnings updates from big tech companies that continue to raise questions about the resilience of the U.S. economy.
Data from the Bureau of Economic Analysis showed a modest slowdown in the Federal Reserve's preferred measure of U.S. inflation, suggesting a possible peak in broader consumer price pressures and a pullback in the central bank's rate hike path.
While Apple's (AAPL) September quarter numbers topped forecasts, muted iPhone growth rates, and a slowdown in services revenues, cast a pall over the tech giant's conservative holiday forecast. Amazon (AMZN), meanwhile, missed Street estimates for December quarter sales by around $5 billion, and, like Apple, noted a bigger-than-expected headwind from the surging U.S. dollar.
The late Thursday updates capped a grim weak for Big Tech earnings, which saw notable declines for both Microsoft (MSFT) and Google (GOOGL), and have reset expectations for both third- and fourth-quarter S&P 500 profit totals despite a solid round of updates from industrial, consumer and pharmaceutical companies.
Stocks are finding relief, however, in the form of lower Treasury bond yields, which have retreated firmly over the past week amid fading bets on big Federal Reserve rates into the end of the year following dovish policy decisions from both the Bank of Canada and the European Central Bank earlier this week.
Benchmark 10-year note yields were last seen trading at 4.004%, down from last week's fifteen year high of 4.375%, while 2-year notes rose to 4.404%. The CME Group's FedWatch, meanwhile, suggests only a 44.2% chance of a 75 basis point rate hike in December - while noting an 83.7% chance of similar move at the Fed's policy meeting next week in Washington.
On Wall Street, the S&P 500 finished up 2.24%, while the Dow Jones Industrial Average soared 828 points, or 2.59%, to 32,861.
The Dow is on track for its best month since January 1976.
Oil stocks were higher, with Chevron (CVX) and Exxon (XOM) rising 1.13% and 2.9% respectively after both groups posted stronger-than-expected third quarter earnings -- and a collective $31.4 billion in net income -- amid elevated global crude prices.
The tech-focused Nasdaq gained 2.87% even with the big pre-market decline for Amazon, which finished down 6.8% after its disappointing holiday revenue forecast and slowing Web Services growth rates more than offset better-than-expected third-quarter earnings.
Apple, meanwhile, was able carve out a 7.2% gain after a solid set of fourth quarter earnings offset a muted holiday quarter sales outlook for the world's biggest tech company.
Intel (INTC) shares were active, too, rising 10.7% after the chipmaker posted stronger-than-expected third quarter earnings while unveiling big job cuts that offset another pullback in its full-year sales forecast.
Tesla (TSLA) shares gained 1.52% as CEO Elon Musk assumed another executive role at Twitter following his $44 billion takeover of the social media group and the firing of four of its most senior managers.
Twitter CEO Parag Agrawal, CFO Ned Segal, general counsel Seam Edgett and legal affairs chief Vijaya Gadde were all dismissed by Musk late Thursday, according to multiple media reports, as the world's richest man moved to become interim chief of the group - adding to his portfolio of roles that includes Tesla, SpaceX, Neuralink and the Boring Company.
In overseas markets, the region-wide Stoxx 600 was down 0.12% in late-day Frankfurt trading following a mixed series of third quarter earnings and data showing Germany's economy grew modestly over third quarter, defying recession fears.
Overnight in Asia, stocks remained pinned to two-year lows amid further declines in China, which is seeing renewed increases in Covid infections and a pullback in industrial profits. The region-wide MSCI ex-Japan index was marked 1.9% lower heading into the close of trading.
Japan's Nikkei 225 fell 0.88% following a dovish policy meeting for the Bank of Japan, which made no changes to its zero interest rate strategy but unveiled plans to buy more government bonds to fight a rise in market yields.
