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Stocks climbed Friday, as investors digested positive earnings reports from Alphabet and Microsoft and the latest inflation data. The Federal Reserve's preferred inflation gauge was up 2.7% from a year earlier in March, in line with expectations.Key Events
The stock market roared higher on Friday, after the latest wave of tech earnings overshadowed worries about sticky inflation.
The Dow Jones Industrial Average gained 53 points, or 0.4%. The S&P 500 and the tech-heavy Nasdaq Composite gained 1% and 2%, respectively.
Earnings reports from Alphabet and Microsoft after the close on Thursday sent shares rallying in Friday's session. Beyond the companies themselves, updates on artificial intelligence investments boosted chip stocks.
The 2-year Treasury yield was at 4.998% while the 10-year yield hit 4.67%. Yields pulled back after the personal-consumption expenditures, or PCE, price index for March came in mostly in line with expectations. While the report showed price growth continues to be stubborn, traders were worried the inflation would come in even hotter than economists had forecast.
While the reading wasn't a boost for stocks by any means, it did provide some breathing room for a tech-earnings driven rally. The results set a high bar for next week's wave of tech earnings, which includes Amazon.com, Advanced Micro Devices, Super Micro Computer, and Apple.
Earnings reports from Google's parent Alphabet and Microsoft breathed new life into the market on Friday.
The "Magnificent Seven" group that includes the aforementioned tech stocks, along with Tesla, Apple, Amazon.com, Meta Platforms and Nvidia, were on track to add $686 billion in market capitalization this week, according to Dow Jones Market Data.
Alphabet stock was up 10% in recent trading, Nvidia stock was up 5.5%, Amazon stock was up 3.6%, and Microsoft stock was up 2.6%. On the flip side, Meta stock was flat, Apple stock was down 0.3%, and Tesla stock was down 0.5%.
The Dow Jones Industrial Average was up 220 points, or 0.6%. The S&P 500 was up 1.2%. The Nasdaq Composite was up 2.2%. One reason the Dow was lagging behind is because it doesn't include Alphabet.
Within the S&P 500, 315 of its members were rising. Its top-performing sector, communication services, was up 2.7% and being led by Alphabet. Meanwhile, Super Micro Computer, Nvidia, and other AI plays were leading the technology sector, which was up about 1.3%.
Though Friday's core PCE showed stubborn inflation, traders were able to look past the report thanks to the latest round of tech earnings.
Alphabet shares surge after Google's parent posts better-than-expected earnings and announces its first cash dividend, Microsoft posts 31% quarterly growth in Azure cloud-computing revenue, and Exxon Mobil's earnings miss estimates.
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