Stocks rebounded sharply on strong earnings from some Big Tech names and an encouraging reading on consumer spending.
Better-than-expected quarterly reports from Google parent Alphabet (GOOGL) and Microsoft (MSFT) helped reignite risk appetite, while the latest economic news alleviated immediate concerns that a potential soft landing was increasingly unlikely.
Market participants started the day with a sigh of relief after the latest reading on inflation essentially matched economists' forecast. The Personal Consumption Expenditures Price (PCE) Index rose 0.3% last month, the Bureau of Economic Analysis said Friday.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Consumer spending was surprisingly strong, rising 0.5% in March. Taken together, the inflation and consumption data helped calm some market jitters in wake of Thursday's release of gross domestic product (GDP). Stocks sold off sharply in the previous session over concerns that economic growth cooled in the first quarter even as price pressures continued to mount.
"Big-tech earnings last night from Alphabet and Microsoft are driving risk-on sentiments today, with investors largely ignoring two consecutive days of hotter-than-projected inflation," wrote Jose Torres, senior economist at Interactive Brokers. A deflationary outlook from Walmart (WMT) CEO John Furner also bolstered "animal spirits," Torres said.
As for Microsoft, the Buy-rated Dow Jones stock rose 1.8% after reporting better-than-expected quarterly profit and revenue the previous evening. The company said strong demand from artificial intelligence (AI) boosted demand for software and services.
In other single-stock news, integrated oil majors Exxon Mobil (XOM) and Chevron (CVX) moved in opposite directions. XOM missed Wall Street's profit estimate, sending shares down 2.9% Friday. Chevron, the Dow's only energy name, exceeded analysts' estimates. CVX stock ended the session 0.3% higher.
At the closing bell, the blue-chip Dow Jones Industrial Average was up 0.4% at 38,239, while the broader S&P 500 rose 1% to 5,099. The tech-heavy Nasdaq Composite soared 2% to 15,927.
Alphabet tops $2 trillion in market cap
Alphabet reported Street-beating earnings and revenue late Thursday, boosted by solid results in cloud services and advertising. But what really put the stock over the top was the Google parent's announcement of its first dividend.
The company said it plans to start paying a quarterly cash dividend of 20 cents a share, subject to board approval. Moreover, Alphabet authorized $70 billion in new stock buybacks, or the same amount as last year.
The news propelled GOOGL stock to a 10.2% gain on the day, sending its stock past $2 trillion in market capitalization for the first time.
Alphabet joins Magnificent 7 stocks Apple (AAPL) and Nvidia (NVDA) in the club of U.S.-listed companies with market values of more than $2 trillion. Microsoft, the world's most valuable publicly traded company, remains the sole member of the $3 trillion club.
Related content
- Analysts' Top S&P 500 Stocks to Buy Now
- Best Dividend Stocks for Dependable Dividend Growth
- 8 Best Commodity ETFs to Buy Now
-
Stock Market Today: Dow Leads as UnitedHealth Stock PopsUnitedHealth was the best Dow Jones stock Monday on reports that Medicare Advantage payments could rise in 2026.
-
Earnings Season: Live Updates and CommentaryFourth-quarter earnings season is getting underway, and Wall Street is keeping a close eye on both results and guidance.
-
Stock Market Today: Dow Leads as UnitedHealth Stock Pops
UnitedHealth was the best Dow Jones stock Monday on reports that Medicare Advantage payments could rise in 2026.
-
How to Organize Your Financial Life (and Paperwork)To simplify the future for yourself and your heirs, put a financial contingency plan in place. The peace of mind you'll get is well worth the effort.
-
Financial Confidence? It's Just Good Planning, Boomers SayBaby Boomers may have hit the jackpot money-wise, but many attribute their wealth to financial planning and professional advice rather than good timing.
-
Will You Be Able to Afford Your Dream Retirement?You might need to save more than you think you do. Here are some expenses that might be larger than you expect, along with ways to ensure you save enough.
-
Three Steps to Simplify Paying Your Taxes in RetirementOnce you retire, how you pay some of your taxes can change. Here's how to get a handle on them so you don't run afoul of the IRS and face penalties.
-
More SECURE 2.0 Retirement Enhancements Kick in This YearSaving for retirement gets a boost with these SECURE 2.0 Act provisions that are starting in 2025.
-
Saving for Your Emergency Fund: As Easy as 1-3-6An emergency fund that can cover six months' worth of expenses is far easier to build if you focus on smaller goals at first.
-
Stock Market Today: Dow Slides 697 Points on Super-Hot Jobs DataWhen the December nonfarm payrolls report hit the tape, there was no question which way stocks would go at Friday's opening bell.
