This reading comes at a time when Wall Street is frantically reducing its expectations for Fed rate cuts this year. Since the start of the year, traders have readjusted their bets from seven to just one.
Wall Street rebounds strongly this Friday thanks to earnings reports from Alphabet (GOOG, GOOGL) and Microsoft (MSFT)which enliven the hopes of a rally led by big technologyeven as a reading of the Federal Reserve’s preferred inflation gauge revealed that price pressures remain persistent.
The S&P 500 (^GSPC) is up 1%, while the tech-heavy Nasdaq Composite (^IXIC) is up 2%. The Dow Jones Industrial Average (^DJI), which includes fewer tech stocks, rises 0.5% or more than 150 points.
Earnings for Alphabet and Microsoft gave stocks a boost after Thursday’s sell-off, with gains of about 9% and 3%, respectively. The “Magnificent Seven” duo’s stellar results showed cloud revenues driven by strong demand for artificial intelligence, and the potential for both to benefit from that boom.
What data does the market look at?
performance fueled confidence that the profits of the big seven technology companies can lift the broader market out of apathy. Those hopes had suffered a setback due to the disappointing prognosis of Goal (GOAL) At the beginning of the week.
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At the same time, the market assimilated the latest reading of the personal consumption expenditure price index, the Fed’s preferred inflation indicator, for March. The “core” measure in that report, which excludes the cost of food and energy, rose 2.8% from last year, above estimates of 2.7% but unchanged from the previous annual increase.
This reading comes at a time when Wall Street is frantically reducing its expectations for Fed rate cuts this year. Since the start of the year, traders have readjusted their bets from seven to just one. Stocks rise as investors take a positive view on persistent inflation readings.
Investors overlooked another worrying inflation reading on Friday, prompted in the hope that another rally led by big technology can lift the market above the broader uncertainty of Federal Reserve policy.
Source: Ambito
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