The S&P 500 and Dow climbed in choppy trade on Friday after April inflation statistics showed inflation expanded broadly as expected, bolstering hopes that the Federal Reserve may decrease rates this year.
The Commerce Department said that the Fed’s favorite inflation barometer, the Personal Consumption Expenditure Index, climbed 0.3% in April, matching analyst estimates and holding steady from March. The annual rate was 2.7%, surpassing estimates, while core PCE rose 0.2% monthly, below 0.3%.
Lower U.S. government yields lifted megacap growth stocks, including Apple and Nvidia, by 0.34% and 1.4%, respectively.
Rate-sensitive utilities and real estate climbed, while S&P 500 tech jumped 0.3% after falling 2.4%.
After the data publication, September rate reduction predictions crossed 50% from 48.7%. Most of the week, CME Fed Watch anticipated below 50%.
“After a few months of rising, inflation is finally going sideways, and hopefully we will resume a downtrend… but markets will be relieved because they are living in fear of bad numbers,” said Marc Ostwald, chief economist and global strategist at ADM Investor Services International.
The Nasdaq logo is displayed at the Nasdaq Market site in Times Square in New York City, U.S., December 3, 2021. REUTERS/Jeenah Moon
Late in the day, Raphael Bostic, the president of Atlanta and a voting member of the Federal Open Market Committee, will also talk.
The Dow Jones Industrial Average was up 112 points, or 0.30%, at 38,223.94 at 9:46 a.m. ET. The S&P 500 was up 16 points, or 0.31%, at 5,251.78; and the Nasdaq Composite was up 27.10 points, or 0.16%, at 16,764.18.
The stock price of Zscaler went up 11.3% after the company that makes security solutions predicted earnings for the fourth quarter that were higher than expected.
Gap (GPS.N), which opens in a new tab, stock went up 19% after the clothing company raised its annual sales forecast and posted earnings that were higher than expected in the first quarter. This showed that its strategy of bringing out new styles to turn things around was working.
The stock of DJT.O. went down 4.8%. Donald Trump lied when he said he paid a porn star to keep quiet during the 2016 election, according to a jury in New York.
The NYSE went down 5.16 points and the Nasdaq went down 2.86 points.
In the last 52 weeks, the Nasdaq saw 27 new highs and 22 new lows. The S&P saw only seven.
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