Friday witnessed a remarkable surge in Wall Street’s primary indexes, fueled by robust quarterly performances from Alphabet, which propelled its market value beyond the $2 trillion threshold. Adding to the market rally was an inflation report that met expectations, assuaging concerns regarding potential fluctuations in interest rates.
Alphabet’s stock soared by an impressive 10.8%, reaching a record peak following the announcement of its inaugural dividend and a massive $70 billion stock buyback program. These announcements, coupled with better-than-anticipated first-quarter results, briefly pushed the tech behemoth’s market capitalization over the $2 trillion mark during intraday trading.
In addition to Alphabet’s stellar performance, Microsoft also made significant contributions to the positive sentiment. The tech giant’s shares climbed 2% after surpassing Wall Street’s projections for third-quarter revenue and profit. Microsoft attributed its strong showing to advancements in AI adoption across its cloud services.
The positive momentum continued with the release of the personal consumption expenditures (PCE) price index, which showed a 0.3% increase in March, aligning precisely with economists’ forecasts. Moreover, when volatile food and energy components were excluded, the index still saw a 0.3% uptick, consistent with predictions. Annually, the index reached 2.8%, slightly surpassing forecasts.
Steve Wyett, chief investment strategist at BOK Financial, remarked on the positive inflation data, noting that while it did not undermine the Federal Reserve’s confidence in the direction of inflation trends, it did not necessarily bolster their confidence in reaching their 2% target consistently. Consequently, money markets signaled an increased likelihood of a rate cut in September.
Overall, strong earnings performances across various sectors throughout the week lifted Wall Street’s primary stock indexes. The S&P 500 was poised to break three consecutive weeks of losses, while the Nasdaq was set to end four consecutive weeks of declines. According to LSEG data, adjusted blended earnings for the first quarter are anticipated to grow by 8.7% year-on-year, up from the 7.4% growth reported on Thursday.
As of 9:43 a.m. ET, the Dow Jones Industrial Average rose by 94.39 points, the S&P 500 increased by 36.08 points, and the Nasdaq Composite climbed by 207.74 points. This positive momentum reflects renewed investor confidence and optimism in the market’s trajectory, driven by strong corporate earnings and favorable economic indicators.
