Traders work the floor during morning trading at the New York Stock exchange (NYSE) ahead of the US Federal Reserve’s decision on lending rates, in New York on January 31, 2024.
Angela Weiss | Afp | Getty Images
Stocks rose on Friday after December’s revised inflation reading came in lower than first reported, and the S&P 500 broke above the historic 5,000 level as a strong earnings season powered on.
The Dow Jones Industrial Average slipped 80 points, or 0.2%, while the S&P 500 rose 0.3%. The Nasdaq Composite added 0.8%. For the week, the S&P is up 1.1%, while the blue-chip Dow and the Nasdaq Composite have gained 0.1% and 2%, respectively.
A solid earnings season, easing inflation data and a resilient economy have have charged 2024’s market rally, setting stocks up for a fifth consecutive week of gains. It’s also propelled the S&P above the 5,000 level after touching the milestone during Thursday’s session. The S&P 500 first crossed 4,000 in April 2021.
S&P 500
“A close above this closely watched level will undoubtedly create headlines and further feed fear of missing out (FOMO) emotions,” said Adam Turnquist, chief technical strategist at LPL Financial. “Outside of a potential sentiment boost, round numbers such as 5,000 often provide a psychological area of support or resistance for the market.”
A revision lower in December’s consumer price index also helped sentiment after the government adjusted the figure to a 0.2% increase, down from a 0.3% increase first reported. Core inflation figures, excluding food and energy, were the same. Treasury yields briefly traded lower following the release of the revised figures. January’s CPI figures are due next week.
Megacap technology stocks gained again on Friday, contributing to the S&P’s march above 5,000. Nvidia and Alphabet added more than 1% each. Cloudflare skyrocketed 23% on strong earnings, boosting the broader cloud sector in tandem.
Elsewhere, PepsiCo fell 2% on mixed results, while Take-Two Interactive slumped 8% on a disappointing outlook. Pinterest dropped 9% after issuing a weaker-than-expected forecast and missing revenue estimates.
A total of 337 S&P companies have reported quarterly earnings, with 77% of them surprising to the upside on earnings, according to FactSet.