Wall Street: S&P 500, Dow flat after inflation data; Intel’s grim predictions weigh in
According to a report from the U.S. Department of Commerce, the Federal Reserve’s preferred inflation indicator, the personal consumption expenditures index, rose moderately in December.
If annual inflation growth remains below 3% for three consecutive months, the central bank could begin cutting interest rates this year.
“Today’s report is clearly market-friendly, although it does not at this point suggest that the Fed will cut rates at its March 20 meeting,” said Quincy Crosby, chief global strategist at LPL Financial.
“Unless next month’s inflation-related data collection clearly reveals a path to 2%, the Fed will likely wait until May or June to begin easing interest rates.”
Pressuring the tech-heavy Nasdaq, Intel fell to a six-week low after forecasting its first-quarter revenue could miss estimates by more than $2 billion and lead to losses of 1.6% to 2.2% for other chip stocks, including Advanced Micro Devices. It fell 12.1%. , Qualcomm and Micron Technologies.
The Philadelphia SE Semiconductor index fell 2.4%, and the S&P 500 technology sector was the only sector in the red, down 0.7%. This, along with Tesla’s growth warning on Wednesday, is likely to have deepened concerns about the rich valuations of large-cap companies. Five of the “Magnificent Seven” – Apple, Microsoft, Amazon.com, Alphabet and Meta Platforms – are scheduled to report results next week.
Chip-making tools maker KLA Corp also fell 4.8% after its third-quarter revenue forecast was weaker than expected.
The recent rise in chip and technology stocks helped revive a Wall Street rally that lost steam early in the year after surging in 2023 as investors grew uncertain about when a rate cut could occur this year.
The S&P 500 hit its fifth straight record high on Thursday after data reflecting strong U.S. economic growth in the fourth quarter defied gloomy predictions of a recession in the wake of the Federal Reserve’s sharp interest rate hikes.
All three major indexes posted gains for the third straight week, making them the 12th weekly gainers among 13 states.
At 9:49 a.m. ET, the Dow Jones Industrial Average rose 36.03 points (0.09%) to 38,085.16, the S&P 500 fell 3.32 points (0.07%) to 4,890.84, and the Nasdaq Composite Index fell 32.89 points (0.21%). did. %, 15,477.61.
Among them, American Express added 7.1% as the credit card company forecast higher-than-expected full-year revenue, while peer Visa added 7.1% after the world’s largest payments processor beat its tepid revenue growth forecast for the quarter. It fell 2.1%.
LSEG data shows that 78.2% of S&P 500 companies that have reported earnings so far have exceeded expectations. This compares to a long-term average return of 67%.
Advancing stocks outpaced declining ones by a ratio of 2.25:1 on the NYSE and 1.75:1 on Nasdaq.
The S&P recorded 26 new 52-week highs and new lows, while the Nasdaq recorded 48 new highs and 28 new lows.
