By Bansari Mayur Kamdar and Johann M Cherian
(Reuters) – Wall Street rose on Friday after data signaling easing inflation pressures added to hopes that the Federal Reserve’s policy tightening was ending, while chip stocks rose as Intel posted a surprise quarterly profit. U.S. annual inflation slowed considerably in June, likely pushing the Federal Reserve closer to ending its fastest interest rate hiking cycle since the 1980s. In the 12 months through June, the PCE price index advanced 3.0%. That was the smallest annual gain since March 2021 and followed a 3.8% rise in May.
“We had a decent PCE number, which indicates moderating inflation,” said Mike Olsen, portfolio manager at Motley Fool Asset Management.
“If you were the Fed, you’d be more concerned about making sure the job is done on inflation and are now threading that needle of a possibility of a recession.” On the earnings front, Intel’s results and forecast pointed to an improving PC market, sending the chipmaker’s shares up 6.8%. Peers Nvidia and Marvell Technology gained over 1% each.
More than half of the firms listed on the S&P 500 have reported second quarter earnings as of Friday, out of which 78.7% have surpassed analyst expectations, according to Refinitiv data.On Thursday, the blue-chips Dow snapped its longest winning streak since 1987 as U.S. Treasury yields pressured stocks after news that the Bank of Japan will allow long-term interest rates to rise. The Bank of Japan made its yield curve control policy more flexible and loosened its defense of a long-term interest rate cap, in moves seen by investors as a prelude to an eventual shift away from massive monetary stimulus. The yield on the U.S. 10-year note slipped from 4% hit in the previous session, lifting megacap growth and technology stocks sharply higher. All three major U.S. indexes are on track to end the week higher, supported by Big Tech earnings, hopes that the Fed’s monetary policy tightening was ending and the world’s largest economy was heading for a soft landing.
At 11:45 a.m. ET, the Dow Jones Industrial Average was up 273.35 points, or 0.77%, at 35,556.07, the S&P 500 was up 52.30 points, or 1.15%, at 4,589.71, and the Nasdaq Composite was up 281.56 points, or 2.00%, at 14,331.67.
Procter & Gamble climbed 3.4% after the consumer behemoth beat analysts’ estimates for quarterly sales.Ford Motor shed 4.2% after Chief Executive Jim Farley outlined a change in the automaker’s product strategy, slowing the ramp-up of money-losing EVs. Enphase Energy fell 10.0% after the solar inverter maker’s third-quarter revenue forecast missed expectations, while Juniper Networks tumbled 6.4% as the network operator forecast third-quarter revenue below market estimates.
Exxon Mobil fell 2.7% after the oil giant posted a 56% slump in quarterly profit, while peer Chevron shed 0.7% after forecasting its annual production near the low-end of its previously estimated range.
Reata Pharmaceuticals surged 52.5% after Biogen agreed to buy the rare disease drugmaker for nearly $6.5 billion. Advancing issues outnumbered decliners by a 3.72-to-1 ratio on the NYSE and a 3.43-to-1 ratio on the Nasdaq.
The S&P index recorded 25 new 52-week highs and two new lows, while the Nasdaq recorded 65 new highs and 57 new lows.
(Reporting by Bansari Mayur Kamdar and Johann M Cherian in Bengaluru; Editing by Maju Samuel)
