NEW YORK: Large tech shares led the market on Thursday (April 13), lifting US stocks to strong gains following better inflation data that added to hopes of a shift in Federal Reserve (Fed) monetary policy.
Shares of Apple, Netflix and Google parent Alphabet rose at least 2% following the report on US wholesale prices, which declined 0.5% in March.
The report came on the heels of government data on Wednesday that showed a generally improving pricing picture, although inflation remained elevated when food and energy costs were stripped out.
“Inflation is on a slowing trend,” said LBBW’s Karl Haeling. “There’s definitely an optimism that the end is near in terms of the Fed’s cycle of interest rate increases.”
The tech-rich Nasdaq led the major indices, rising 236.94 points, or 1.99%, to 12,166.27.
The Dow Jones Industrial Average rose 383.19 points, or 1.14%, to 34,029.69 and the S&P 500 gained 54.27 points, or 1.33%, at 4,146.22.
The rally came on the eve of a deluge of earnings reports from large banks, including JPMorgan Chase and Wells Fargo, which added 0.4% and 1.2%, respectively.
The results will receive heavy scrutiny following the failure last month of Silicon Valley Bank and two other lenders.
“Markets rallied today following the lower inflation data this morning, as it’s still all about the Fed so it’s really all about inflation,” said David Carter, investment specialist at JPMorgan Private Bank in New York.
“Together with yesterday’s muted CPI data, PPI is also suggesting some slowdown in inflation which could mean a quick end to Fed tightening.”
Financial markets are pricing in a roughly one-in-three probability that the central bank will press the pause button and let the Fed funds target rate stand in the 4.75% to 5.00% range, according to CME's FedWatch tool.
“Tomorrow’s bank earnings could give insight into the strength of regional banks and future lending activity,“ Carter added. “It will be interesting to see what banks say tomorrow about future economic growth.”
Delta Air Lines declined 1.1% after reporting a US$363 million loss in the first quarter. However, the company noted that it scored record March quarter revenue in light of strong underlying demand for flying. – AFP, Reuters
Delta Air Lines declined 1.1% after reporting a US$363 million loss in the first quarter although it scored record March quarter revenue in light of strong underlying demand for flying. – AFPpic
Source: The Sun Daily
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