(CercleFinance.com) – The New York Stock Exchange opened higher on Friday after the announcement of inflation figures in line with expectations while solid corporate results support the technology sector.
At the end of the morning, the Dow Jones advanced 0.5% to 38,209.5 points, while the Nasdaq Composite climbed 2.2% to 15,954.4 points.
Highly anticipated, the PCE consumer price index slowed in March, which argues for a rate cut by the Federal Reserve in September.
Excluding food and energy, so-called ‘core’ prices increased by 0.3% month-on-month and by 2.8% annually after 2.9% in February.
Above all, investors noted that these figures were in line with their expectations, therefore without any unpleasant surprises, while inflation figures tended to exceed expectations recently.
This last point, considered reassuring, favors the decline in Treasury bond yields, the rise of which was until now supported by expectations of later-than-expected reductions in the Fed’s rate cuts.
The yield on ten-year bonds, which yesterday reached its highest level in more than six months at 4.73%, thus returned to 4.65%.
Added to this welcome beginning of relaxation on the sovereign debt side is a series of better than expected corporate results in the technology sector.
Microsoft gains more than 2% after posting a much better than expected net profit in the first quarter, driven by the ‘cloud’ and a 31% jump in Azure turnover.
The title of Alphabet, the parent company of Google, soared by almost 10%, investors being seduced by accounts higher than expectations, but above all the payment of the first dividend in the history of the group and the announcement of a massive share buyback plan.
These solid performances allow all of the ‘Magnificent Seven’ – including Amazon (+2%) and Nvidia (+1.4%) – to get back in the right direction.
On the stock side, Chevron (-1%) and ExxonMobil (-4%) are not benefiting from the rebound in oil prices following the publication of quarterly results without much fanfare.
US light crude is currently up 0.1% to $83.6 per barrel.
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