Stocks ended a strong month on a high note as investors weighed a positive inflation update against another disappointing performance from technology companies that led to a sell-off in several large caps.
First inflation Data. Before opening, Bureau of Economic Analysis The personal consumption expenditures (PCE) price index, a measure of consumer spending, rose 0.3% from March to April, the same as the previous month and in line with economists’ expectations. The annual rate of increase for the PCE index was also unchanged at 2.7%.
Core PCE (excluding volatile foods) energy Housing costs rose 0.2% in April from the previous month, down slightly from a 0.3% increase in March but flat from a year earlier. Consumer spending rose 0.2% month-on-month in April, weaker than expected, and personal income rose 0.3%, the data showed.
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“The PCE price index did not show much of an inflationary advance, but it did not show a setback either,” it said. Chris LarkinHe joined E*TRADE from Morgan Stanley as Managing Director of Trading and Investments.
PCE report raises chances of September rate cut
Still, investors need to be patient, Larkin added: “The Fed has signaled it needs more than a month of favorable data to confirm that inflation is credibly declining, and there is still no reason to believe the first rate cuts will come any sooner than September,” he wrote.
In fact, CME Group FedWatchToolsFutures traders are betting the Fed is likely to keep interest rates on hold. Interest level The Fed will leave the rate unchanged at its June meeting (99% probability) and July meeting (85% probability). The probability of a quarter-point cut in September is now 47%, up from 45% yesterday.
Inflation data helped the three indexes open higher on Friday. Dow Jones Industrial Average (+1.5% to 38,686) and wider S&P 500 (+0.8% to 5,277) maintained its gains through the closing price. Salesforce (CRM, +7.5%) rebounded from Thursday. Profit-related hit.
Technology Focus Nasdaq Composite Index Meanwhile, the (-0.01% to 16,735) recovered from an intraday drop of around 2% but still ended in the red.
Dell, MongoDB share prices plummet after earnings announcement
Negative earnings response from some companies Tech stocks This weighed heavily on investor sentiment. Most notably, Dell Technologies Dell beat expectations for first-quarter sales and profits but missed its second-quarter profit guidance and said it expects its gross margins to decline due to rising artificial intelligence (AI) costs.
MongoDB (MDB) also saw its shares fall after the earnings report, plummeting 23.9% after reporting quarterly results. The database platform provider reported first-quarter profit and sales that beat expectations but lowered its full-year outlook due to weak consumer growth.
Still, the Needham analyst Mike Cikos He maintained a buy rating on the struggling tech stock. “We see MongoDB as an emerging industry leader with a strong product and addressing a large market opportunity,” Cikos said. He also acknowledged that the market will need time to digest MDB’s disappointing guidance and spending outlook, but expects growth to accelerate again next year.
Several 7 Great Stocks Headwinds remained strong for the broader market for much of Friday. Amazon (AMZN, -1.6%) was the largest negative factor. NVIDIA (NVDA) fell 0.8%, but last week’s rally helped it finish the month up 27%. Incredible earnings report.
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