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
-
Stocks Edge Higher With Nvidia, Fed in Focus: Stock Market TodayThe AI bellwether reports earnings after today's close, while Wall Street is keeping a cautious eye on President Trump's attacks against the Fed.
-
New Trump Tax Bill: Five Changes Homeowners Need to Know NowTax Changes Trump’s new tax legislation is reshaping how tax breaks for homeowners work.
-
Stocks Edge Higher With Nvidia, Fed in Focus: Stock Market Today
The AI bellwether reports earnings after today's close, while Wall Street is keeping a cautious eye on President Trump's attacks against the Fed.
-
The Smart Way to Retire: 13 Habits to Steal From the WealthyCheck out these practical strategies that anyone can adopt, not just the rich, and get closer to achieving your retirement dreams.
-
Are There Opportunities to Invest in China?Opportunities to invest in China are plentiful and, arguably, shouldn't be ignored in the U.S. Here's where to look.
-
Coulda, Woulda, Shoulda: Are These 5 Stocks Too Overvalued to Buy Now?Investors worried about missing the boat on overvalued stocks need not fret. These five names, while expensive, are still seeing lots of love from analysts.
-
I'm a Financial Planning Pro: Do Your Family a Final Favor and Write Them a Love LetterSpecify your preferences in this personal document that shares your wishes on how you want to be remembered and celebrated. Your family will thank you for easing an emotional time.
-
The Future of Financial Advice Is Human: Gen Z Trusts Advisers, But AI Skills MatterGraduates entering the workforce trust human advisers more than AI tools with their financial planning. But AI can still enhance the client/adviser relationship.
-
President Trump Makes Markets Move Again: Stock Market TodayThe White House is moving ahead with plans to reshape the Federal Reserve and to buy shares in more sectors and stocks.
-
Can President Trump Fire Fed Governor Lisa Cook?Markets hate uncertainty, especially when it comes to monetary policy and interest rates, and questions about the Fed are compounding.
