NEW YORK: Wall Street rose on Friday as fresh inflation data eased concerns about new rate hikes and chip stocks benefited from Intel’s unexpected profit.
US annual inflation slowed considerably in June, likely pushing the Federal Reserve closer to ending its fastest interest rate hiking cycle since the 1980s.
“People are more sanguine about the possibility of inflation being under control and the economy avoiding a recession,” said Win Murray, director of research at asset manager Diamond Hill.
In the 12 months through June, the PCE price index advanced 3.0%. That was the smallest annual gain since March 2021 and followed a 3.8% rise in May.
Most of the 11 major S&P 500 sectors posted gains, led by communications services, which gained 2.01% as big tech companies kept an upward trend after announcing earnings earlier this week.
On the earnings front, Intel’s results and forecast pointed to an improving PC market, sending the chipmaker’s shares up 5.35%.
Peers Nvidia and Marvell Technology gained 1.52% and 1.55% respectively.
More than half of the firms listed on the S&P 500 have reported second quarter earnings as of Friday, out of which 78.7% have surpassed analyst expectations, according to Refinitiv data.
On Thursday, the blue-chip Dow snapped its longest winning streak since 1987 as US Treasury yields pressured stocks after news that the Bank of Japan will allow long-term interest rates to rise.
The Bank of Japan made its yield curve control policy more flexible and loosened its defense of a long-term interest rate cap, in moves seen by investors as a prelude to an eventual shift away from massive monetary stimulus.
The yield on the US 10-year note slipped from 4% hit in the previous session, lifting megacap growth and technology stocks sharply higher.
All three major US indexes are on track to end the week higher, supported by Big Tech earnings, hopes that the Fed’s monetary policy tightening is ending and that the world’s largest economy was heading for a soft landing.
The Dow Jones Industrial Average rose 76.67 points, or 0.22%, to 35,359.39, the S&P 500 gained 27.36 points, or 0.60%, to 4,564.77 and the Nasdaq Composite added 205.39 points, or 1.46%, to 14,255.49.
Procter & Gamble climbed 2.75% after the consumer behemoth beat analysts’ estimates for quarterly sales.
Ford Motor shed 4.25% after Chief Executive Jim Farley outlined a change in the automaker’s product strategy, slowing the ramp-up of money-losing EVs.
Enphase Energy fell 8.43% after the solar inverter maker’s third-quarter revenue forecast missed expectations, while Juniper Networks tumbled 6.32% as the network operator forecast third-quarter revenue below market estimates.
Exxon Mobil fell 1.77% after the oil giant posted a 56% slump in quarterly profit, while peer Chevron shed 1.08% after forecasting annual production near the low end of its previously estimated range.
Reata Pharmaceuticals surged 52.35% after Biogen agreed to buy the rare disease drugmaker for nearly $6.5 billion.
Advancing issues outnumbered declining ones on the NYSE by a 2.31-to-1 ratio; on Nasdaq, a 2.62-to-1 ratio favored advancers.
The S&P 500 posted 26 new 52-week highs and two new lows; the Nasdaq Composite recorded 73 new highs and 69 new lows.