Stocks rebounded sharply on strong earnings from some Big Tech names and an encouraging reading on consumer spending.
Better-than-expected quarterly reports from Google parent Alphabet (GOOGL) and Microsoft (MSFT) helped reignite risk appetite, while the latest economic news alleviated immediate concerns that a potential soft landing was increasingly unlikely.
Market participants started the day with a sigh of relief after the latest reading on inflation essentially matched economists' forecast. The Personal Consumption Expenditures Price (PCE) Index rose 0.3% last month, the Bureau of Economic Analysis said Friday.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Consumer spending was surprisingly strong, rising 0.5% in March. Taken together, the inflation and consumption data helped calm some market jitters in wake of Thursday's release of gross domestic product (GDP). Stocks sold off sharply in the previous session over concerns that economic growth cooled in the first quarter even as price pressures continued to mount.
"Big-tech earnings last night from Alphabet and Microsoft are driving risk-on sentiments today, with investors largely ignoring two consecutive days of hotter-than-projected inflation," wrote Jose Torres, senior economist at Interactive Brokers. A deflationary outlook from Walmart (WMT) CEO John Furner also bolstered "animal spirits," Torres said.
As for Microsoft, the Buy-rated Dow Jones stock rose 1.8% after reporting better-than-expected quarterly profit and revenue the previous evening. The company said strong demand from artificial intelligence (AI) boosted demand for software and services.
In other single-stock news, integrated oil majors Exxon Mobil (XOM) and Chevron (CVX) moved in opposite directions. XOM missed Wall Street's profit estimate, sending shares down 2.9% Friday. Chevron, the Dow's only energy name, exceeded analysts' estimates. CVX stock ended the session 0.3% higher.
At the closing bell, the blue-chip Dow Jones Industrial Average was up 0.4% at 38,239, while the broader S&P 500 rose 1% to 5,099. The tech-heavy Nasdaq Composite soared 2% to 15,927.
Alphabet tops $2 trillion in market cap
Alphabet reported Street-beating earnings and revenue late Thursday, boosted by solid results in cloud services and advertising. But what really put the stock over the top was the Google parent's announcement of its first dividend.
The company said it plans to start paying a quarterly cash dividend of 20 cents a share, subject to board approval. Moreover, Alphabet authorized $70 billion in new stock buybacks, or the same amount as last year.
The news propelled GOOGL stock to a 10.2% gain on the day, sending its stock past $2 trillion in market capitalization for the first time.
Alphabet joins Magnificent 7 stocks Apple (AAPL) and Nvidia (NVDA) in the club of U.S.-listed companies with market values of more than $2 trillion. Microsoft, the world's most valuable publicly traded company, remains the sole member of the $3 trillion club.
Related content
- Analysts' Top S&P 500 Stocks to Buy Now
- Best Dividend Stocks for Dependable Dividend Growth
- 8 Best Commodity ETFs to Buy Now
-
Your Estate Plan Isn't Complete Until You've Done These StepsCongratulations on getting your estate plan in order. Now, you need to communicate the relevant details to ensure your plan is effectively carried out.
-
A Nightmare for Parents: Navigating Tenant Rights in a CrisisThis family's story illustrates how important it is to get help sooner rather than later and highlights the complexities of tenant rights and legal protections.
-
Your Estate Plan Isn't 'Done' Until You've Completed These Five Steps, From an Estate Planning Attorney
Congratulations on getting your estate plan in order. Now, you need to communicate the relevant details to ensure your plan is effectively carried out.
-
A Nightmare for Parents: How to Navigate the Legal Boundaries of Tenant Rights During a Family Crisis
This family's story illustrates how important it is to get help sooner rather than later and highlights the complexities of tenant rights and legal protections.
-
Amazon Surge Sends S&P 500, Nasdaq Higher to Start November: Stock Market TodayAmazon inked a $38 billion cloud deal with OpenAI, which sent the stock to the top of the Dow Jones on Monday.
-
If You'd Put $1,000 Into Home Depot Stock 20 Years Ago, Here's What You'd Have TodayHome Depot stock has been a buy-and-hold banger for truly long-term investors.
-
Eight Steps to Help Get You Through the Open Enrollment Jungle at WorkWondering how to survive open enrollment this year? Arm yourself with these tools to cut through the process and get the best workplace benefits for you.
-
Seven Moves for High-Net-Worth People to Make Before End of 2025, From a Financial PlannerIt's time to focus on how they can potentially reduce their taxes, align their finances with family goals and build their financial confidence for the new year.
-
I'm a Financial Planner: These Are the Seven Tiers of Retirement Well-BeingLet's apply Maslow's hierarchy of needs to financial planning to create a guide for ranking financial priorities.
-
Why More Americans Are Redefining Retirement, Just Like I DidRetirement readiness requires more than just money. You have a lot of decisions to make about what kind of life you want to live and how to make it happen.
