Stocks opened mostly higher on Friday as earnings from Amazon (AMZN) and Intel (INTC) eased worries around Big Tech, in the rundown to the release of a closely watched US inflation reading.
The tech-heavy Nasdaq Composite (^IXIC), which closed Thursday deep in the red, bounced back on Friday, up roughly 1%. The benchmark S&P 500 (^GSPC) also moved higher, up about 0.4%.
The Dow Jones Industrial Average (^DJI) hugged the flatline.
The moves point to a sunnier start to the last session in a tough week, which has seen the S&P 500 threaten to join the Nasdaq in correction territory amid a sell-off fueled by mixed earnings from megacap techs.
On Friday, the Federal Reserve’s preferred inflation metric showed prices continued to cool in September — a critical data point the Federal Reserve will consider as it weighs its next interest rate decision on Nov. 1.
The Personal Consumption Expenditures (PCE) Index grew 3.4% year over year in September, in line with August’s revised increase and also in line with expectations. “Core” PCE, which excludes the volatile food and energy categories, grew 3.7%, down from the revised 3.8% from the month prior and in line with what economists surveyed by Bloomberg had expected.
Month-over-month, core PCE rose 0.3% in September, an uptick from the 0.1% rise seen in August, which was the lowest rate since November 2020.
Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards
Uncertainty around whether the Fed will raise interest rates again this year have weighed on stocks this year. With the central bank’s next meeting scheduled for Nov. 1, the time to decide is narrowing.
The latest US GDP reading came in hot, a sign that the Fed’s higher-for-longer stance isn’t holding back the American consumer. But some analysts are questioning how long that resilience can last, given recurring words of caution in companies’ outlooks alongside earnings.
Following the release of Friday’s inflation data, markets were pricing in a roughly 99% chance the Federal Reserve keeps rates unchanged at its upcoming policy meeting, according to data from the CME Group.
Outside of inflation, earnings have also been top of mind for investors.
Amazon’s results late Thursday lifted spirits after its CEO’s bullish message around a likely AI boost, sending shares 6% higher in pre-market. Chipmaker Intel’s stock also rallied in the wake of its well-received third-quarter earnings. Exxon Mobil (XOM) and Chevron (CVX) are highlights on the docket Friday.
AS&P 500, Nasdaq open higher
Stocks opened mostly higher on Friday with the tech-heavy Nasdaq Composite (^IXIC), which closed Thursday deep in the red, bouncing back, up about 1%. The benchmark S&P 500 (^GSPC) also moved higher, up around 0.4%. The Dow Jones Industrial Average (^DJI) hugged the flatline.
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More signs of cooling inflation
The Federal Reserve’s preferred inflation metric showed prices continued to cool in September — a critical data point the Federal Reserve will consider as it weighs its next interest rate decision on Nov. 1.
The Personal Consumption Expenditures (PCE) Index grew 3.4% year over year in September, in line with August’s revised increase and also in-line with expectations. “Core” PCE, which excludes the volatile food and energy categories, grew 3.7%, down from the revised 3.8% from the month prior and in line with what economists surveyed by Bloomberg had expected.
Month-over-month, core PCE rose 0.3% in September, an uptick from the 0.1% rise seen in August, which was the lowest rate since November 2020.
Inflation has remained significantly above the Federal Reserve’s 2% target. A labor market that, while softening in certain areas, is still tight, suggests the Federal Reserve could continue to raise interest rates. The Federal Reserve’s latest meeting minutes showed policymakers support a more restrictive rate environment.
Cleveland Fed President Loretta Mester said last week she still sees the possibility of one more rate hike this year.
But markets still expect the central bank to pause its hikes at its meeting next month. Following the release of the data, markets were pricing in a roughly 99% chance the Federal Reserve keeps rates unchanged at its upcoming policy meeting, according to data from the CME Group.
KStock futures pop as Amazon, Intel earnings boost hopes
US stocks were poised for a comeback Friday after two days of losses, as earnings from Amazon and Intel lifted spirits ahead of the key PCE inflation release.
Futures on the Dow Jones Industrial Average (^DJI) were up 0.12%, or 40 points, while S&P 500 (^GSPC) futures were up 0.51%. Contracts on the tech-heavy Nasdaq 100 (^NDX) jumped 0.96%.
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