S&P 500 Rises To New High Following Inflation Data Release

(CTN News) – An in-line inflation print signaled continued moderation in price pressures, helping the S&P 500 scale another record high on Friday, while the Nasdaq slipped after Intel’s gloomy outlook.

Despite a strong fourth-quarter US economic growth reading, the S&P 500 closed at an all-time high for a fifth straight session on Thursday.

Among the three major indexes, all have advanced for the third straight week and for the 12th consecutive week.

Keeping the annual inflation rate below 3% for a third consecutive month, the US Commerce Department reported that the personal consumption expenditure S&P 500 index – the Federal Reserve’s preferred inflation gauge – rose moderately in December, strengthening the case for rate cuts this year.

The inflation rate is trending in the right direction, and coupled with a strong GDP figure, the economy is almost in a Goldilocks state, said Todd Morgan, chairman of Bel Air Investment Advisors.

Intel slumped 11.1% to a six-week low after forecasting its first-quarter revenue could miss estimates by more than $2 billion, dragging down the Nasdaq.

Broadcom, Qualcomm, and Micron Technology all lost over 1%, resulting in a 2.3% drop in the Philadelphia SE Semiconductor index.

S&P 500 technology fell 0.6%, leading sectoral losses.

Together, this and Tesla’s growth warning on Wednesday likely exacerbated concerns about overvalued megacaps. Apple, Microsoft, Amazon.com, Alphabet, and Meta Platforms are among the “Magnificent Seven” due to report results next week.

The shares of chipmaking tools maker KLA Corp fell 5.9% after its revenue forecast for the third quarter fell short of expectations.

In the S&P 500 companies that have reported earnings so far, 78.2% have exceeded expectations, compared with a long-term average of 67%.

Following bumper gains in 2023, chip and technology stocks resurrected a Wall Street rally which had lost steam at the start of this year as investors grappled with growing uncertainty over interest rate cuts.

In the 11:41 a.m. Eastern Time, the Dow Jones Industrial Average rose 95.80 points, or 0.25%, to 38,144.93, while the S&P 500 rose 2.93 points, or 0.06%, to 4,897.09 and the Nasdaq Composite fell 12.62 points, or 0.08%, to 15,497.87.

A record high was set by American Express as it forecast a higher-than-expected annual profit, while Visa slumped 1.6% after forecasting a tepid revenue increase for the current quarter.

After posting upbeat fourth-quarter results, Colgate-Palmolive shares rose 2.3%.

On the NYSE, advancing issues outnumbered decliners by a ratio of 1.66-to-1, and on the Nasdaq, advancing issues outnumbered decliners by a ratio of 1.23-to-1.

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