- US stocks power higher
- Alphabet, Snap and Microsoft up on strong results
- Inflation reading comes in hot
4.05pm: Earnings drive tech rally
Stocks remained in positive territory at Friday’s close with Big Tech stocks leading the gains on strong earnings despite a new report that shows inflation remains sticky in the US.
The tech-heavy Nasdaq added 2% at 15,927 points, the S&P 500 was up 1% at 5,099 points and the Dow Jones added 0.4% at 38,239 points.
Major movers included Google parent Alphabet which added 10%, Snapchat owner Snap, up 27.5%, and Microsoft, which gained 1.8%.
"US stocks have made more gains this afternoon, thanks mainly to the positive afterglow from last night’s big tech earnings," IG chief market analyst Chris Beauchamp commented.
"But the persistence of inflation and its refusal to keep heading lower will be a major headache for US markets, and will cast a long shadow over next week’s Fed meeting."
12:10pm: Tech titans market US rebound
US stocks rebounded on Friday, led by strong earnings from tech giants Alphabet and Microsoft, fueling hopes for a Big Tech-led rally.
The S&P 500 rose 1.1%, the Nasdaq Composite climbed 2%, and the Dow Jones Industrial Average increased by 0.5%.
Alphabet and Microsoft's stellar results, showcasing robust cloud revenue driven by AI demand, boosted market confidence.
However, concerns about inflation lingered as the Fed's preferred inflation gauge, the personal consumption expenditures price index, showed a 2.8% increase over the previous year. This reinforced expectations of a longer wait for any interest rate cuts, with markets now pricing in only a 45% chance of a rate cut in September.
Analysts at Bank of America called the hotter data "bad, but not terrible."
"The question going into today's release was how much of the beat in quarterly inflation would be reflected in revisions rather than the March data. Revisions ended up playing a big role: the core PCE was revised up 5bp for January, while February was little changed. Given the math of quarterly averaging, this mitigated the impact on the y/y rate."
As for the Fed, Bank of America acknolowedged that the read was "too high for comfort" to consider a rate cut.
"The fact that the data are consistent with strong demand rather than a supply shock makes the Fed's decision easier: both of its mandates suggest that cuts remain firmly off the table for now."
9:34am: Wall Street shakes of inflation data to open higher
US stocks have opened trading higher after shaking off hotter-than-expected inflation data, with investors hopeful the strength of earnings from Microsoft and Google will be able to propel the market today.
The S&P 500 opened around 0.5% higher at 5,078, while the Nasdaq rallied 1.2% to 15,802.
The Dow Jones remained unchanged at the open at 39,071.
Microsoft opened around 3.5% higher, while Alphabet surged close to 11.5% after it confirmed the launch of its first-ever dividend and saw quarterly results top estimates.
Snap, the owner of Snapchat, added a whopping 25% to its value on Friday after it reported strong revenue and profit growth.
Revenues at the social media company lifted by 21% to US$1.19 billion during the three months, improving on Wall Street guidance of US$1.12 billion.
Snap’s return to double-digit sales growth comes after six straight quarters of single-digit growth or revenue declines.
Tech giant Intel slipped around 9% at the start of trading after it issued worse-than-expected guidance for the upcoming quarter.
Guidance for the ongoing second quarter of US$0.10 earnings per share on revenue of US$13 billion came in below Wall Street expectations for US$0.25 and $13.57 billion.
8.39am: Wall Street teetering as inflation data comes in hot
Wall Street stocks are positioned to open relatively flat after key inflation data came in hotter than expected during March.
The PCE Price Index, a key measure of inflation in the US, came in at 2.7% last month, increasing from February's 2.5% and higher than the 2.6% forecast.
Core PCE figures, which outstrip volatile energy and food prices, reached 2.8% for March, keeping flat compared to the month prior but failing to slow to 2.7% like analysts had forecast.
The Dow Jones is set to begin trading around 53 points higher at 38,332, while the S&P 500 and Nasdaq jumped 36 and 164 points respectively.
Concerns of elevated interest rates for longer have been a thorn in the side of the market for some months now, and today may be no different, with it likely going to offset strong gains from tech giants Microsoft and Google owner Alphabet.
Shares in Microsoft are scheduled to open around 4% higher after it surpassed expectations on both the earnings per share (EPS) and revenue fronts in the first quarter.
It leaves the tech giant nearing a return to a US$3 trillion valuation when the markets open.