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
-
Choose a Beneficiary for Your Estate Plan: It's Not 'Duck, Duck, Goose'Choosing a beneficiary for your 401(k), insurance policy or similar assets is crucial for estate planning. Here is how to do it, and six pitfalls to avoid.
-
T-Mobile's Free iPhone 17 Deal: A Smart Switch or a Hidden Catch?Receive a free iPhone 17 when you switch to T-Mobile. We'll explain whether the deal is worth it.
-
How an Expired Passport Thwarted Blackmail (and What Other Important Documents You Should Keep)An optometrist produced his expired passport to foil a blackmail attempt by the daughter of a former employee. After proving he was out of the country on the date of a forged diary entry, he took it a step further.
-
Optimize, Grow, Retain: The Power of Annual Client ReviewsFinancial advisers can use annual reviews to help enhance client outcomes, strengthen relationships and build their practice.
-
I'm a Real Estate Investing Pro: This Is What Investors Should Know About Truck Stop InvestmentsTruck stops might seem like good investments, but they can actually be a risky gamble due to unstable fuel prices, unreliable operators and coming changes in transportation. Instead, consider safer options like industrial or residential properties.
-
How Digital Platforms Are Changing the Way You Invest in GoldInvesting in gold is easier than ever thanks to digital platforms. Learn how online tools are lowering costs, increasing transparency and making gold accessible to all investors.
-
Stocks Rise to Start Fed Week: Stock Market TodayThe Nasdaq Composite and S&P 500 hit new record closing highs as Wall Street awaits the Fed's next rate cut.
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary FormsStandard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
This Is How Life Insurance Can Fund Your Dreams NowBeyond a death benefit, life insurance can provide significant financial value and flexibility through 'living benefits' while you are still alive, helping with expenses like education, business ventures or retirement.
-
Potential Trouble for Retirees: A Wealth Adviser's Guide to the OBBB's Impact on RetirementWhile some provisions might help, others could push you into a higher tax bracket and raise your costs. Be strategic about Roth conversions, charitable donations, estate tax plans and health care expenditures.
