Nasdaq, S&P, Dow extend gains to third day after key inflation gauge (SP500) adjusts
U.S. stocks on Friday were on track to extend their gains to a third straight session after the Federal Reserve-priority index of inflation was allowed to moderate, stoking hopes that the central bank could may be closer to the end of the rate hike cycle.
Investors continue to buy growth stocks, with media and consumer discretionary services taking turns in the spotlight.
At the last hour of trading, the tech-heavy Nasdaq Composite (COMP.IND) used to be up 1.48% to 12,191.67 points. The benchmark S&P 500 (SP500) used to be 1.17% higher up 4,098.05 points, while the blue-chip Dow (DJI) 1.03% increase to 33,198.17 points.
All 11 S&P sectors are trading in the green, led by Communications Services and Communications Services. Utilities increase the least.
For the week, all three major averages posted gains of about 3% each.
Economic data shows the core personal consumption expenditure index – the Fed’s preferred inflation gauge – rose +0.3% in February, slower than the +0.6% gain in January. On a year-over-year basis, core PCE came in at 4.6%, slightly lower than the 4.7% forecast.
These numbers have reinforced the reason for the Fed to consider ending its interest rate hike campaign. According to CME’s FedWatch tool, markets are currently pricing in a ~46% probability of not raising rates at the central bank’s monetary policy committee meeting in May and a ~54% probability of an increase. 25 basis points.
Also on the economic calendar is the Chicago PMI surprised rose in March, though still in contraction territory. In addition, the University of Michigan consumer sentiment gauge in March fell in its last reading.
New York Fed President John Williams in a speech at a CME Group event acknowledged that inflation is under control, although more work remains to be done to bring it down even lower. Investors will also keep an eye on Fed Board Governor Lisa Cook, who will speak at 5:45 p.m. ET.
Moving to the fixed-income market, Treasury yields are slightly lower, with longer 10-year yields (US10Y) fell 4 basis points to 3.51% and the 2-year yield is more rate sensitive (US2Y) slipped 1 basis point to 4.09%.
Among active stocks, Micron Technology (MU) are among the stocks with the highest loss rates on the S&P 500 (SP500) between a investigation by Beijing’s national cyber regulator into products it sells in China.
Tesla (TSLA) added more than 3%. Bloomberg on Thursday report that the electric vehicle maker is looking to build a battery factory in the US alongside Chinese battery giant CATL.