Stocks opened mostly higher Friday as investors took in the latest inflation data and earnings reports. The main indexes lost steam as the session wore on, though the tech-heavy Nasdaq Composite held on for a win thanks to impressive earnings from mega-cap stock Amazon.com (AMZN).
The Bureau of Economic Analysis this morning said its September personal consumption and expenditures (PCE) index, the Fed's preferred measure of inflation that tracks consumer spending, was up 0.4% month-over-month and 3.4% year-over-year – both figures matching what was seen in August.
Meanwhile, the monthly increase (+0.3%) in the core PCE index, which excludes volatile food and energy prices, was higher than the previous month, though the annual increase (3.7%) was lower.
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Today's data "provided confirmation that the Federal Reserve’s monetary policy is continuing to reduce inflation over time, albeit slowly," says Brian Pietrangelo, senior vice president and managing director of investment strategy at Key Private Bank. "We believe the Federal Reserve is highly likely to pause interest rate hikes next week given the directional slowing of PCE inflation to wait for additional data, including the Employment Situation next Friday, to consider for the December meeting."
JPMorgan stock sinks on news Dimon will sell shares
JPMorgan Chase (JPM) was one of the worst Dow Jones stocks Friday after a securities filing revealed Jamie Dimon, CEO of the financial giant, plans to sell 1 million JPM shares in 2024. Dimon currently owns 8.6 million shares of JPM, and it will mark his first stock sale since he took over the head role in 2006.
"Mr. Dimon continues to believe the company’s prospects are very strong and his stake in the company will remain very significant," JPMorgan Chase said in the 8-K filing. Nevertheless, the blue chip stock tumbled 3.6% today.
However, the worst Dow stock today was Chevron (CVX), which plunged 6.7% after the oil major reported third-quarter earnings of $3.05 per share – well below the $3.70 per share analysts were expecting. Still, revenue of $51.9 billion came in above estimate. Earlier this week, Chevron said it will buy fellow energy firm Hess (HES) for $53 billion in stock.
Amazon earnings keep Nasdaq above water
As for the main indexes, the blue chip Dow Jones Industrial Average fared the worst, shedding 1.1% to 32,417. The S&P 500 fell 0.5% to 4,117, ending in correction territory following a 10% decline from its July 31 closing high of 4,588.96.
The Nasdaq, which entered a correction on Wednesday, eked out a 0.4% gain to 12,643, thanks to impressive Amazon earnings. The e-commerce giant reported much higher than expected third-quarter earnings of 94 cents per share on revenue of $143.1 billion. Operating income of $11.2 billion came in well above the company's forecast, though revenue growth (+12% year-over-year) in the company's Amazon Web Services (AWS) cloud segment was softer than anticipated. AMZN stock surged 6.8% today.
There are plenty of big events next week that have the potential to spark volatility in stocks. In addition to the Fed meeting and Friday's jobs report, several high-profile companies – including tech giant Apple (AAPL, +0.8%) – are on the earnings calendar.
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