Stocks finished higher Friday, driven by outsized gains for tech heavyweights Alphabet and Microsoft, as the S&P 500 and the Nasdaq posted their best week since November.
The Dow Jones Industrial Average finished up 153 points, or 0.40%, to 38,239.66, while the S&P 500 gained 51 points, or 1.02%, to 5,099.66 and the tech-heavy rose 316 points, or 2.03%, to 15,927.90
For the week, the S&P gained 2.7% to snap a three-week losing streak, while the Nasdaq gained 4.2% for its first positive week in five and the Dow edged up 0.7%, according to CNBC.
The Bureau of Economic Analysis' PCE Price Index showed core prices rose at an annualized rate of 2.8% last month, the slowest in three years. On a monthly basis, core pressures were up 0.3%, matching February's increase and Wall Street's consensus estimate.
Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance, said that “given the elevated levels of inflation – and this is the new normal for 2024 – the market is going to need to get over hopes for Fed rate cuts.”
“Yes, they may cut once (or not at all), but there is no possibility the Fed is going to cut rates 3 or more times, unless we go into recession,” he said.
Zaccarelli said he was still optimistic on the market, however, "as we believe that rate cuts aren’t necessary for the bull market to continue."
"Instead, continued economic expansion and growth in corporate profits – which are already seeing from the largest companies in the market – are what will propel stock prices to new highs," he said. "Just be aware that volatility around the election, geopolitical events and even future inflation data is likely; it’s not going to be a smooth ride this year (unlike last year)."
Updated at 1:20 PM EDT
Holding gains
Stocks are set for their best weekly gain since November 3, with the S&P 500 rising 64 points, or 1.27%, and the Nasdaq up 360 points, or 2.31%. The Dow was last marked 230 points higher.
Whiplash: yesterday was the worst day for Communication Services (-4.02%) since last October ... today is the best day (+4.06%) since the beginning of this past February
— Kevin Gordon (@KevRGordon) April 26, 2024
[Past performance is no guarantee of future results] pic.twitter.com/eTj6hBMXg7
Updated at 10:50 AM EDT
Google top
Alphabet shares briefly shot past Nvidia (NVDA) , in terms of market value, in early Friday trading following the tech giant's blowout first quarter earnings and solid near-term revenue forecasts.
Google was last marked 9.5% higher at $172.99 each, with a market cap of $2.14 trillion, while Nvidia was pegged 4.4% higher at $862.75 each, with a market value of $2.16 trillion.
⚡ Trending stocks across Captain:
— Captain Financial (@CaptFinancial) April 26, 2024
1. $SPY
2. $MSFT
3. $GOOGL
4. $GOOG
5. $NVDA
6. $META
7. $QQQ
8. $AMZN
9. $TSLA
10. $SNAP
+ $CMG $SPX $INTC $ROKU $AAPL $VRT $AMD $MDNAF $SMCI $EPAZ $GME $SRPT $NEM $WDC $WING $AEM $AVGO $DXCM $GILD $OPTN
Full list: https://t.co/7PkPMzZ6UR pic.twitter.com/j6NQ8kurua
Updated at 9:33 AM EDT
Solid open
The S&P 500 added 30 points, or 0.6%, in the opening minutes of trading, with the Nasdaq up 190 points, or 1.2%. Early declines for Chevron and Exxon pulled the Dow modestly into the red.
"Yesterday’s cool headline GDP number was accompanied by a hot inflation reading in the fine print," said Chris Larkin, managing director for trading and investing at E*Trade from Morgan Stanley. "Today’s PCE Price Index was only slightly higher than expected, but it still confirmed the sticky inflation trend and the idea that interest rates are going to remain higher for longer."
"In the meantime, we’ll see if that sentiment is enough to dilute the stock market’s enthusiasm about yesterday’s earnings beats from Microsoft and Alphabet," he added.
S&P 500 Opening Bell Heatmap (April 26, 2024)$SPY +0.49% 🟩$QQQ +0.63% 🟩$DJI -0.01% 🟥$IWM +0.09% 🟩 pic.twitter.com/HPojspn4GE
— Wall St Engine (@wallstengine) April 26, 2024
Updated at 8:58 AM EDT
Steady goes
The Federal Reserve's preferred inflation gauge held steady last month, suggesting modest progress from the Federal Reserve in slowing price pressures in the world's biggest economy.
The Bureau of Economic Analysis' PCE Price Index showed core prices rose at an annualized rate of 2.8% last month, the slowest in three years. On a monthly basis, core pressures were up 0.3%, matching February's increase and Wall Street's consensus estimate.
Stocks extended gains following the data release, with futures contracts tied to the S&P 500 indicating a 42 point opening bell gain and those linked to the Nasdaq priced for a 173 point advance.
Benchmark 10-year Treasury note yields were marked 3 basis points lower at 4.663% while 2-year notes eased to 4.981%.
US PCE Core Deflator confirms sticky inflation with the YoY unch at 2.8%. The 3-mth change YoY jumps to 4.1% while the 6-mth stays unch. at 2.8% #inflation pic.twitter.com/oHp7SpiLyu
— Ole S Hansen (@Ole_S_Hansen) April 26, 2024
Updated at 7:30 AM EDT
Fed up?
Lots of market chatter this morning tied to a Wall Street Journal piece that suggests "former Trump administration officials and other supporters of the presumptive GOP nominee" are drawing up plans to curb the Federal Reserve's independence and put the President at the heart of future policy decisions.
The Fed first gained its independence from the Treasury through the "Treasury-Fed Accord" in 1951, with President Harry Truman appointing Assistant Treasury Secretary William McChesney Martin as the first independent Chair.
Donald Trump’s allies are quietly drafting proposals that would attempt to erode the Federal Reserve’s independence if the former president wins a second term https://t.co/iynLbjsHgx
— Jared Malsin (@jmalsin) April 26, 2024
Stock Market Today
Stocks closed lower Thursday, with the S&P 500 sliding around 0.5%, after Commerce Department data showed a slowdown in first quarter GDP, which was estimated at 1.6%, with a notable spike higher in underlying inflation pressures.
The data triggered another pushback on bets that the Federal Reserve would unveil its first interest rate reduction later this year. The CME Group's FedWatch now suggests no more than a 44% chance at any of the central bank's autumn meetings.
Related: U.S. growth slowdown, with inflation spike, raises early stagflation risks
Tech earnings after the close, however, are likely to reverse those declines heading into the final day of the trading week and into the close of the month.
Alphabet (GOOG) soared in overnight trading after the Google parent posted better-than-expected first quarter earnings, a solid AI-related outlook and unveiled its first-ever dividend.
The stock's 11.6% gain, in fact, could pull the tech giant past the $2 trillion valuation mark if it holds into the open.
Microsoft (MSFT) shares were also on the move, rising 4% in premarket trading, after the world's most-valuable company topped Wall Street forecasts for its fiscal third quarter, while estimating solid gains for its cloud computing division over the three months ending in June.
On the downside, chipmaker Intel (INTC) slumped 7.3%, a move that would extend the stock's 2024 decline to around 35%, after the chipmaker posted softer-than-expected first-quarter earnings and a muted revenue outlook.
ExxonMobil (XOM) shares slid 1.9% after the oil major posted softer-than-expected first-quarter earnings of $2.06 per share, thanks in part to weakening refining margins. Smaller rival Chevron (CVX) was little changed after it beat Wall Street profit forecasts thanks to higher production volumes.
The big tech gains, however, are likely to provide a solid boost for the Nasdaq, which is up 2.15% for the week, with futures suggesting a 193 point gain for the tech-focused benchmark.
The broader S&P 500, which is up 1.64% for the week, is called 39 points higher, with the Dow Jones Industrial Average priced for a 40 point advance.
Investors will first have to navigate a key inflation reading prior to the opening bell, with the Bureau of Economic Analysis publishing its March PCE inflation report on Friday, April 26.
Analysts are looking for core and headline readings of 2.6%, down from 2.8% and 2.5% respectively over the month of February. Any faster reading, tied in part to the underlying pressures seen in this week's GDP data, could quickly reverse early market gains.
Benchmark 2-year Treasury note yields were holding steady at 4.991% heading into the start of the New York trading session, with 10-year notes pegged at 4.690%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.06% higher at 105.667.
More Wall Street Analysts:
- Analyst unveils new Nike price target ahead of big summer for sports
- Analysts weigh in on Google-parent Alphabet’s stock after cloud event
- Analysts revamp Disney stock price target after proxy fight
In overseas markets, Europe's Stoxx 600 was marked 0.62% higher in early Frankfurt trading, following the biggest earnings week of the year, while Britain's FTSE 100 rose 0.33% in London.
Overnight in Asia, the Bank of Japan left its key policy rates unchanged following a two-day meeting in Tokyo, but lifted its inflation forecast for the current financial year to 2.8% from 2.4%.
The Nikkei 225 closed 0.81% higher on the session as the yen remained pinned to a 1990 low of 156.76 against the U.S. dollar, and tech stocks led the session gains. The regionwide MSCI ex-Japan benchmark rose 0.79% into the close of trading.
Related: Veteran fund manager picks favorite stocks for 2024
