4:07pm: Chipmakers bolster end-of-quarter rally
The Dow closed Friday up 415 points, 1.3%, at 33,274, the Nasdaq Composite added 208 points, 1.7%, to 12,222 and the S&P 500 improved 58 points, 1.4%, to 4,109. The small-cap Russell 2000 index rose 29 points, 1.6%, to 1,797.
The benchmarks struggled at times during a quarter that included a banking crisis and more interest rate increases but each ended the three-month period in the green.
The recent rally is “helping to confirm the market’s perception that the problems that brought the market to a crisis of confidence could very well be contained,” said Quincy Krosby, chief global strategist for LPL Financial.
Recently, chipmakers have been a big part of that success.
“The semiconductors, [which] have come to be viewed as an important bellwether for global growth, delivered a strong performance,” he added.
Meanwhile, shares associated with former President Donald Trump have done well in the aftermath of his indictment on Thursday.
Digital World Acquisition Corp, the special-purpose acquisition company merging with Truth Social -owner Trump Media, saw its shares rise more than 10% to $14.38. Another right-wing social media company, Rumble, saw its stock improve more than 4% to $9.73.
12.05pm: S&P 500 set to end 1Q with a nearly 6% gain
US stocks were higher in noon trading after the core Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation gauge, rose 0.3% in February, less than the 0.4% expected by economists.
At midday, the Dow gained 255 points to 33,114, while the S&P 500 added 35 points at 4,086 and the tech-heavy Nasdaq rose 132 points to 12,145.
“The lower PCE figure in the US was just what the doctor ordered, and provided investors with reason to take a sunnier view of the outlook as they peer into Q2,” IG chief market analyst Chris Beauchamp said.
“Having escaped without any more bank failures this week, hopes will rise that the crisis of March is now behind us,” he added.
Notable movers included shares of elf Beauty Inc, which climbed nearly 5% after Morgan Stanley analysts raised their target price on the cosmetics stock while implying 19% upside.
9:35am: Stocks higher as first quarter wraps up
US stocks kicked off the last day of the first quarter in positive territory, buoyed by cooler-than-expected PCE data released before the opening bell.
Just after the market opened, the Dow Jones had added 0.5% at 33,027 points, the S&P 500 was up 0.4% at 4,067 points, and the Nasdaq was up 0.4% at 12,058 points.
FOREX.com market analyst Fiona Cincotta noted that the latest PCE data unexpectedly cooling was fueling optimism that peak interest rates could be near.
“Things are moving in the right direction for the Fed but at a painstakingly slow pace,” she said.
“The data comes after the markets had scaled back rate hike bets as the banking crisis unfolded and priced in a pause by the Fed in the May meeting and two rate cuts by the end of the year.”
Cincotta said in line with less hawkish Fed bets, stocks were rising and the USD had eased.
“US indices are set to book strong gains across the week with the S&P 500 on course for its best week since January,” Cincotta said.
9:05am: PCE data surprises
The Federal Reserve’s preferred measure of inflation, the personal consumption expenditures (PCE) price index, rose less than expected last month, fueling hopes that the central bank’s aggressive rate hikes over recent months have helped ease price pressures.
The headline PCE price index rose 0.3% during February, below the expected 0.4%. For the 12 months to February, it rose 5%, below the 5.2% estimate.
This marked a slight cooling from January when the headline PCE increased by 0.6% monthly and 5.4% annually.
The core PCE, which excludes food and energy, rose 0.3% month-over-month and at an annual rate of 4.6% in February.
Stock futures were in positive territory following the release of the data, with the Dow Jones up 0.3%, the S&P 500 up 0.2%, and the Nasdaq up 0.1% in pre-market trading.
6:30am: All eyes on PCE reading
Wall Street looks set to end the first quarter of 2023 on a mixed note ahead of the pre-market release of the Personal Consumption Expenditures (PCE) index, the Federal Reserve's preferred measure of inflation.
Futures for the Dow Jones Industrial Average (DJIA) rose 0.2% in Friday pre-market trading, while those for the broader S&P 500 index gained 0.1%. But contracts for the Nasdaq-100 shed 0.1%.
US stocks closed higher on Thursday after fourth-quarter 2022 growth data was revised downward, sparking investor hopes the Fed will pause its rate-hiking moves.
The Nasdaq Composite added 0.7% to 12,013, while the DJIA closed 0.4% higher at 32,859 and the S&P 500 rose 0.6% to 4,051.
“Tech once again lead the bullish charge, with the Nasdaq teetering on the edge of bull market territory,” commented TickMill Group market analyst Patrick Munnelly.
Markets are increasingly pricing rate cuts into the year's end leading investors to allocate to growth stocks, Munnelly noted.
“February data for the Federal Reserve’s preferred inflation gauge, the consumer expenditure deflator is believed to demonstrate a modest retreat in overall inflation to 5.2% from 5.4% in January, the core metric may print a minor uptick to 4.8% from 4.7% prior, once again leaving Fed officials focused on the inflation fight,” he added.